The voluntary signposting agreement to expand access to insurance for vulnerable customers was announced alongside the launch of the BIBA 2020 manifesto
Evidence shows people with pre-existing conditions struggle to obtain affordable insurance (Credit: PxHere)
The British Insurance Brokers’ Association (BIBA) says a new initiative from the UK’s Access to Insurance Working Group will expand access to protection cover for “thousands” of vulnerable consumers.
Alongside its 2020 manifesto launch, BIBA announced that 26 regulated providers of insurance, industry associations and charities had signed an agreement to signpost policy seekers with a vulnerability to a specialist broker if they can’t obtain a regular policy due to an existing condition.
The types of protection coverage BIBA highlighted in its announcement were life insurance, income protection and critical illness insurance.
BIBA executive director Graeme Trudgill said: “BIBA is ideally positioned to help those with medical conditions find their way to a specialist provider to help them access the cover they need, and we committed in our manifesto to launching a signposting agreement.
“This is the culmination of a year of discussion and collaboration across different stakeholders; all with a strong desire to help those most in need.
“The fact that we have been able to launch this signposting system today will make a difference to thousands of people that may previously have thought protection insurance was out of their reach.”
The signposting agreement is voluntary and was the culmination of discussions within the Access to Insurance Working Group that started in September 2018.
The group was formed after the FCA and Treasury Select Committee — a government body concerned with customer access to financial services — found those with pre-existing medical conditions can struggle to obtain affordable coverage.
Why do vulnerable policy seekers need a specialist broker?
In the case of life, income protection and critical illness insurance, an existing health condition may result in loaded premiums to account for increased risk, or a denial from brokers and insurers to provide a policy altogether.
In this instance, specialist firms exist to take a deeper dive into the risk posed by a customer’s existing condition in order to provide a policy that’s affordable.
Specialist broker Cura Financial Services managing director Alan Knowles said: “Specialised firms have the experience and expertise, as well as the appetite, to find solutions for those people who, because of a medical condition or disability, can find obtaining suitable protection insurance a challenge.
“The launch of this agreement is great for customers and the insurance industry alike.”
A document laying out the terms of the agreement stated that those with a disability will also be considered to have a pre-existing condition, including those with a physical or mental impairment that has a “substantial” and “long-term” adverse effect on their ability to carry out normal day-to-day activities.
People living with cancer, HIV and multiple sclerosis are also classed as disabled for the purpose of the agreement.
Insurance disability champion says increasing access to insurance could increase trust in the industry
The first Access to Insurance Working Group meeting was chaired by Johnny Timpson, financial protection specialist for Scottish Widows and the industry’s disability champion — a position bestowed by the government’s Department for Work and Pensions.
Commenting on the new signposting agreement, Timpson predicted it will increase trust in brokers and insurers.
“This is absolutely the right thing to do and will not only make a positive impact on many lives but will raise levels of trust in the insurance sector,” he said.
“Now the work has started to educate those in the sector and its customers on the existence of the agreement and to get as many firms as possible on board.”