If any positives have emerged from the coronavirus crisis the fact that it has proved a glowing advert for the benefits of having a specialist group risk and health insurance intermediary is certainly one of them.
Most businesses, especially smaller ones, simply don’t have time to look out for changes to their covers, premiums and other terms and conditions, but Chase de Vere has its finger constantly on the pulse and can keep you informed of any issues that need to be considered.
Believe you me, changes are going to be plentiful. Some have already occurred, but numerous others are in the pipeline as actuaries and product development teams get to grips with the true implications of COVID-19.
Because different providers are likely to end up taking differing stances, it could transpire that the scheme you currently have is no longer the most competitive or appropriate.
Group death in service cover could be particularly impacted by the pandemic due to the sheer number of fatalities that have occurred. Increases in claims are likely, especially from older age groups and those with underlying health conditions like asthma and diabetes – who could also pose an increased anti-selection risk.
Just under half of respondents say they’ve been able to complete their work to the same standard as previously, with 25% saying they’ve achieved a higher standard and 24% a lower standard.²
Although this may be countered to an extent by an increased demand for the product, fuelled by a greater awareness of the risks of dying prematurely, it could well result in premium rates edging upwards – especially for older age groups and those with certain medical conditions.
Insurers have already added new application questions to determine whether applicants have been exposed to the virus. Cover is being postponed for 7 to 14 days or more in cases where they have. Additionally, insurers are limiting their maximum sums insured temporarily to their non-medical limits due to difficulties in obtaining GP reports and conducting medical examinations in the current environment.
As well as enabling employees to fulfil personal obligations and avoid fuel costs and commuting time, working from home can provide them with a liberating feeling of personal control over their workload and working environment.
The pandemic has also had a significant effect on group private medical insurance (PMI). Indeed, it has seen some people questioning how valuable the product actually is!
Most independent hospitals and pay beds have physically not been available to patients wanting elective surgery because they have been contracted to the NHS.
Nevertheless, although scheme members have been unable to make claims in the short term, they have still enjoyed access to their PMI scheme’s added-value help and information services.
Some have also been able to claim NHS cash benefit, which pays out – typically up to £250 a night – if treatment is taken on the NHS rather than privately. However, this may not apply to COVID-19 patients, unless insurers agree to pay anyway as ex-gratia payments.
It is possible that, because claims have plummeted, PMI insurers may make reimbursements in the form of rebates, payment holidays, cover extensions or future discounts. Indeed, market leader Bupa has already suggested it will recompense customers in some way.
But insurers need to balance this against a pent-up demand that could see a spike in claims volumes once life returns to normal.
It wouldn’t surprise us to see some quite radical positions emerging once the market leaders have clarified their positions. Some insurers, for example, might start offering a greater ability to have hospital treatment abroad or step up their cash benefits and support and information services.
Group income protection, which offers long-term incapacity cover, has been affected less, although stricter underwriting is being applied and cover deferred where applicants have been in contact with anyone with the virus.
We could also see income protection insurers limiting maximum cover to fall within medical limits to obviate the need for GP reports and medical examinations.
Similarly, with group critical illness cover we could start seeing financial benefits for coronavirus-type conditions, either as a small £10,000 to £25,000 lump sum or as a weekly or monthly benefit.
Content correct at the time of writing and is intended for general information only and should not be construed as advice.