Importance of using tech in assessments emphasised
An increased understanding of customers’ vulnerability required under Consumer Duty regulations could help resolve some challenges for new and existing life policies, software provider MorganAsh said.
MorganAsh cited a recent report by reinsurance provider Swiss Re revealing some of these challenges, one of which is regarding couples cohabiting but not married with single life policies.
Another challenge is where consumers have changed employment or liability circumstances, then cover may no longer be in tune with the risk.
According to MorganAsh, many of these issues can be addressed with the collection of vulnerability data as part of Consumer Duty implementations. While some firms are relying on individual assessments of vulnerability, other firms are now moving to collate detailed data on the consumer characteristics and using technology like the MorganAsh MARS system.
Some of these new vulnerability systems also include updates from third party data sets that can highlight changes in employment and marital status on an ongoing basis, enabling these policy checks to be replicated.
“We have highlighted there are over a million new policies a year where no direction of benefits is in place,” Ron Wheatcroft, technical manager at Swiss Re, said. “This means death proceeds from about a third of these may not reach a cohabiting partner, but it is hard to identify which these are.
“The ability to use the data collected for vulnerability management seems a great opportunity to put in place solid identification of this potential harm.”
Andrew Gething (pictured), managing director at MorganAsh, stressed that they are using technology to upgrade vulnerability assessments from a subjective individual’s opinion to an objective digital record of a consumer’s characteristics.
“This opens up the opportunity to match the consumer needs to the products we are providing and looks to highlight where there can be improvements like trusts, beneficiary nomination and revision of policy amounts,” Gething added. “Using the MARS technology, we can do this in a highly cost-effective way, so we can review the large quantities of existing policies in place as well as assess vulnerability at the point of sale.”
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