MorganAsh

Financial advisers are confused by the varying descriptions of tele-interviewing being undertaken – and find it difficult to compare the new business methods being used. Not only are there differences between ‘Big T’ and ‘little t’, but Big T can vary between just filling in forms over the phone, to a full nurse interview that replaces many of the GPRs.

Over the last year, we have witnessed many providers publish their claims and declined claims statistics, and this has improved transparency, but claims statistics are, by their nature, old and reflect previous experience and therefore may not represent the current position.

One answer to the above confusion is for providers to publish their non-disclosure statistics, as these can be easily measured – and they give a good indication of the likely future claim issues. The level of non-disclosure rate depends on many aspects of the distribution channel and the processes adopted. It is much less for good Big T tele-interviewing with nurses, and not nearly so low for little t. It measures the performance of a tele-interview and the quality of the information obtained rather than the method.

There are many ways to measure non-disclosure. The most appropriate non-disclosure measure is to look at material non-disclosure (missing information that would have led to a change in the underwriting decision compared to the GPR). It is suggested that only cases with material non-disclosure with variations of more than +50% are included, as these are within normal error rates. To measure this, the provider collects a GPR, in addition to the normal manner of processing applications. The decisions are compared for the two sources of information, and the percentage reported is the percentage of cases that have a different underwriting decision when underwritten from the GPR. Not all cases with non-disclosure will lead to a claim, so the rate of total non-disclosure does not translate to the rate of declined claims.

For MorganAsh full nurse tele-interviewing, across a collection of providers, the material non-disclosure for life and CI products is 1.7% and for income protection is 5.8%. This compares with mean material non-disclosure on application forms or online systems for the same providers of 18% for life and CI and 34% for income protection, a mean reduction of 86%.

This non-disclosure measure does include fraud, so it is unlikely ever to be zero. It is a good measure of the quality of information collected during the new business process, and the comparison between new business processes.

With all the confusion over the different methods of tele-interviewing, it is a fair and transparent way to measure the quality of the process. It is an easy measure to report on, to compare and measure the present status of performance. It is hence proposed as a fair way to compare the quality of new business processes for financial advisers, to add to the mix of service levels, product features and product price.

Lincoln Financial Group, which uses MorganAsh’s tele-interviewing, has just announced its non-disclosure figures, using the above measurement method. Their results show a reduction from 10% non-disclosure on their application form to 2% for tele-interview. They also released that their non-disclosure on the GPR was 6%, when measured against the tele-interview.

Andrew Gething, CEO of MorganAsh, commented: “Publishing non-disclosure figures gives a good indication of the likelihood of payment of claims, and is representative of the new business process now, rather than several years previously as with claim stats. They measure the results of the new business process and are easy to communicate, thus making it easy for IFAs to compare different providers’ approaches.”

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