The key benefits of the service are expected to include making non-standard terms more competitive and accessible as well as reducing costs for both intermediaries and product providers.
Research* by The Exchange shows that 62% of intermediaries can identify clients as being non-standard risk at pre-quotation stage. The Special Risks Centre will provide further guidance on what constitutes a special risk case and will enable intermediaries to obtain the best available rate for these clients via a specialist underwriting process.
The application and underwriting process will be provided by the originator of the concept, Risk Placement Services (RPS), in conjunction with Otter Risk Solutions. Intermediaries can refer special risk cases to RPS, which has designed a new and innovative process for accessing a dedicated panel of leading protection writers who have agreed to provide a committed and more focussed underwriting service to these non-standard cases. This is an essential feature of this new approach in the risk market, which aims to make non-standard terms more competitive and accessible.
Otter Risk Solutions, a provider of third party underwriting and claims risk management services, will facilitate this process by identifying and obtaining the necessary medical evidence and any other information required for the underwriting of each application.
According to research** 45% of non-standard cases do not make it on to the books of life companies. Assuming that the cost to the provider of underwriting a non-standard risk case, including medical evidence fees, administration and ancillary costs is £200 this represents a cost to the industry of £37 million a year. By reducing the level of multiple applications per individual case the new service is expected to remove millions of pounds from the costs of processing non-standard business.
In addition to this, the Special Risks Centre brings benefits to clients, IFAs and providers alike:
- Intermediaries will be able to circumvent the current inefficient, time-consuming and very expensive process of having to make multiple applications for non-standard cases and, in the process, improve service to clients.
- Providers can considerably reduce the time and money currently spent on processing business through the multiple applications route that have only a one in five chance of completion.
- For non-standard clients, such as those with a medical condition or an occupation or hobby that is considered hazardous, the Special Risks Centre means that in the majority of cases, they will be ‘on risk’ sooner and there is an increase in the likelihood of their case being accepted and at the best available rate.
David Child, chief operating officer at The Exchange, comments:
“The Special Risks Centre is another value added service on Exweb designed to make it quicker and easier for intermediaries to obtain competitive terms for non-standard risks.”
John Dearing, operations director at Otter Risk Solutions, comments:
“Otter Risk Solutions are pleased to be part of this innovative new service which will provide access to affordable insurance premiums to many for the first time.”
Geoff Tresman, managing director at Risk Placement Services, comments:
“We are delighted to be working in partnership with The Exchange to deliver significant added value to the IFA community. The Special Risks Centre on Exweb can help intermediaries confidently offer advice in this area, creating a series of new business opportunities.”
The Special Risks Centre will complement The Exchange’s core product offering and will be made available via Exweb, Exweb Broker and Exweb Call-Centre. Other products, such as impaired annuities and immediate Long Term Care, may also be added at a later stage.
*A survey of 500 IFAs was conducted on Exweb
**RPS analysis based on data provided by the ABI and five leading providers shows that around 414,000 non standard applications were made in 2001 but 45% were either deferred, declined or not proceeded with.
