In 2013, Howie Forest Products undertook a MUBA project. All the scheme members (51 in total) and their spouses were invited to participate in the project. 73% participated with the telephone interview with a further 4% preferring to complete a paper form. Doctors’ reports were obtained on 6% of scheme members in addition to the medical interviews.

The process was a great success, with 85% of liabilities being underwritten. All the medical data was shared with the participating insurers and insurers were very happy with the data received, allowing them to offer significant discounts. Just Retirement won the tender and completed the transaction.

“We received a good reduction from the insurers which enabled us to pursue a buy-in transaction, thus de-risking our scheme.” – Howard Jones, director of Howie Group Limited and trustee of the Howie Group Limited staff retirement benefits plan.

“In 2013, we decided to go to market to insure the current pension benefits of one of our schemes. MorganAsh was contracted to undertake the medical underwriting part of the tender. They interviewed sufficient pensioners and their spouses that made up over 85% of the pension liability. As a result, we were able to insure all current pensions in payment without additional contribution from either the company or the scheme above and beyond the technical provisions already existing in the scheme.

“Following this success, we have repeated the medical underwriting exercise in our other scheme for our high-liability pensioners, but instead of attempting an insurance transaction we used medical underwriting to improve the valuation of our liabilities. This time, MorganAsh achieved a 96% response rate! The outcome showed a reduction in liability due to mortality of some £5m compared to the scheme actuary’s assumptions for this £40m scheme.

“In both cases, MorganAsh carried out this delicate work with sensitivity and efficiency and the weekly progress reporting was excellent too. The payback on the investment in this project is tremendous.” – Howard Jones, director of Howie Group Limited and trustee of the Howie Group Limited staff retirement benefits plan.

“Effectively, we’re seeing medical underwriting of individuals start to be used in the insurance space and this is an example of it coming into pension scheme funding and valuations. I think this will become much more standard with more schemes adopting this type of approach going forward with insurance transactions.” – Iain McLellan, KPMG.

Our clients say:

With MorganAsh tele-interviewing all clients, we are freeing the adviser from the arduous and embarrassing task of collecting medical information. With our product they can focus on the product and financial advice. Advisers and networks are becoming increasingly aware of their exposed liability to their clients in having to undertake the medical interviews. We consider this old model unsustainable within the Treating Customers Fairly environment.

Geoff Spencer, managing director, Shepherds Friendly Society