By Petrie Marx, 14 July 2020
Another transformation that’s taken place in insurance is medical underwriting for new life insurance applicants. To avoid burdening healthcare systems, and following consultations between our Chief Medical Officer Dr Morkel and the National Institute for Communicable Diseases and the Financial Sector Conduct Authority, Sanlam had to change the way in which medical underwriting was conducted for new clients.
“So, we devised a new underwriting model that kept continuity going where we still kept declarations and asked underwriters to assess on the basis of answers provided, on the assumption that some medical screening tests can be provided later on,” explains Petrie Marx, Product Actuary at Sanlam Individual Life.
In the long term, the new underwriting model is not ideal nor sustainable. Therefore, since lockdown measures have begun to ease, Sanlam has reintroduced limited medical services and more options for clients who need to complete their medical requirements. These include clients being able to:
Marx adds that even though medical services are largely back, there are still some limitations: “One of the underwriting services we typically made use of was travelling nurses that would visit clients at work or home. The option of nurses’ visits was initially not possible when medical services became available. Since then, revised regulations have allowed the safe reintroduction of Nurses on Wheels, if other options aren’t available, or if the client is considered vulnerable to other comorbidities. Sanlam also offers a limited service of travelling doctors, which are now also allowed to operate again under similar protocols.
“We also deal with a number of service providers such as pathology and walk-in centres for blood to be taken. We have decided to also house them in Sanlam offices that applicants can visit countrywide to conduct the necessary tests.”
Even though medical tests have had to change somewhat during lockdown, Marx assures that stricter measures for underwriting risk have not been imposed by Sanlam. There’s no policy, for instance, to accept fewer clients or to stop accepting clients over a certain age. Premiums have also not yet increased.
However, the application process itself has become slightly more cumbersome in light of those who tested positive for COVID-19 or are currently experiencing symptoms. Marx explains: “We’ve added more questions on testing positive for COVID-19 and whether new clients are currently experiencing symptoms.
“We also ask clients if they have travelled to another country and those extra risks are now also considered on new cases.
“If clients have tested positive, we will postpone their application for a short while. We will only do the underwriting once we know for certain what the outcome of their COVID-19 exposure is.”
Marx says that the learnings from COVID-19 will accelerate two key developments within Sanlam, namely the use of business intelligence and the use of alternative data sources, which could in future include access to
medical aid and National Health records.
Marx adds that this will be a good thing: “As we get alternative data sources to replace traditional medical testing, it may have a positive effect on the ease of doing business with life insurers and make it less cumbersome to apply for life insurance.”
Sanlam is, however, unlikely to go so far as to introduce self-testing kits. Marx explains: “For underwriting, you need something that is consistently applied and verifiable, so I doubt self-testing will ever be an option.”
One thing that will never change is our clients’ need for peace of mind – something that correct cover and
financial advice can offer them. Whatever happens post-COVID-19, Sanlam’s commitment to covering its clients appropriately will never change. We’re well positioned to help our clients achieve some certainty through
risk cover even in these uncertain times.