There will never be perfect alignment in how medical evolution sits alongside the provisions of past and present insurance definitions, but insurers must respond in a versatile and practical manner, whilst meeting their contractual obligations to their claimants. The following actions may help achieve this outcome:
Industry minimum standards
Industry associations in many life insurance markets issue standard definitions that set minimum criteria for a valid claim event. This creates consumer confidence for policyholders knowing that their insurance product, irrespective of provider, will provide a reasonable level of cover.
Collaboration with clinical professional bodies
Working with clinicians associated with well-respected and recognized professional bodies to help set insurance definitions will provide credibility to insurance products.
Management of the product life cycle
Insurers should regularly review and update their CI definitions to ensure that they reflect appropriate and relevant clinical practice. A regular feedback loop with the claims team should be established and embedded as usual practice. This establishes a channel to receive insights from their practical adjudication experience that can be applied to new product design, creation of definitions and help create accurate pricing.
The assessment of very complex and technical medical information should be handled by experienced claims adjudicators. They must have a deep understanding of the claim triggers and be able to understand where the information presented deviates from claim requirements. Closely working with chief medical officers (CMO’s) is crucial, especially where there is any uncertainty over the claims criteria being met.
Providing cover for a wide range of events that have a serious impact on health is the purpose of CI cover. This may include paying for events at less than 100% because their effects may not be as severe as another event within the same category / diagnosis. However, potential conflict may arise where some less-severe events “top up” to 100% challenging the nature of the product and therefore creating an opportunity to argue that other less-severe events that are not covered at all, should be admitted for a benefit payment.
Communication with policyholders
Communication to policyholders on these reviews and the implications it holds for them is important. Where material changes are made that have an impact on premium and cover, policyholders should be given a timely opportunity to consider and act on this.
Communication with claimants
The nature and timing of communication with a claimant when their claim is deemed to be not valid is crucial. The claims adjudicator should communicate the decision in an empathetic but confident manner. A deep knowledge of the claim events and evidence considered needs to be shared with a clear explanation of why this does not meet policy terms and conditions. A template-like, written letter is not recommended, claimants will expect a conversation about their personal experience, and will have many questions that cannot be addressed through a letter as the first manner of communication. Additionally, an adverse claim outcome should be communicated at the first appropriate opportunity. Delaying a decision whilst the insurer may still be performing some administration activities should be avoided.