Time to let go of our comfort blankets
The introduction of Rules Engines, redesign of application questions, expanded reflexive questioning together with a more pragmatic approach to ratings means that today, around 85% of applicants are underwritten without medical evidence. As an industry, our focus has therefore shifted to how we can improve the process for those applicants for whom medical evidence is required.
Good progress has been made with Nurse Screenings, Laboratory tests and to a certain extent Medical Examinations as they are already returned in a structured format which lends itself to automation. However, automating the assessment of GP reports (GPRs) remains the biggest challenge due to the volume of unstructured attachments. If we could reduce our reliance on these additional attachments, then automation of GPRs will almost certainly prove simpler.
Munich Re has conducted extensive analysis on a full range of GPRs, including medical limits, disclosure driven and post issue reports, with an objective of measuring the true value of the attachments underwriters often request in addition to the standard GPR.
Our analysis showed that in 77% of cases the information contained in additional attachments did not materially impact the final underwriting decision – the key information was contained within the main body of the report. Unsurprisingly the cases where the attachments did add value were where there was a medical history of neurological disorders or severe mental illness, the areas where underwriters have always tended to request additional reports.
How did we become so reliant on additional letters? Looking back several decades, the traditional GPR was two pages and sent to the doctor with the occasional request that hospital letters were enclosed if deemed important. Hospital reports were perhaps included on one in ten reports and if you were the unlucky underwriter to receive the bulging envelope of hospital letters your morning was spent at the photocopier.
GPRs became digitalised, and many surgeries realised it was much quicker to print the patient’s entire medical records and send them to the insurer than to review the history and complete the report. Underwriters began to get used to longer reports and looking for relevant detail in pages of trivial attendance records.
More recently many insurers adopted Subject Access Request (SAR) underwriting where the GP was asked to provide a copy of their patients’ full medical records. Reviewing dozens and dozens of pages of medical history for each GPR, most of it irrelevant for underwriting, became a normal part of the underwriter’s day.
Guidance issued in 2015 by the Information Commissioner’s Office (ICO) led to insurers ceasing to request full medical records via SARs and the industry moved back to using traditional GPRs. However, by now requesting hospital reports and other supplementary evidence had become normalised and whereas twenty years ago one in ten GPRs contained hospital letters today it can be as many as nine in ten.
To improve the efficiency of GPR underwriting Munich Re has developed MIRApply, our web-based GPR tool. Already used by some of the biggest insurers in the German market and now being piloted with two insurers in the UK, MIRApply has been shown to reduce the time taken to underwrite GPRs by up to 90%. MIRApply collects the risk-relevant information from the GP in a totally secure digital format using online reflexive dialogue.
MIRApply not only supplies the structured underwriting data but also provides an instant underwriting decision based on MIRA, Munich Re’s underwriting philosophy, and the information the GP has provided. Importantly MIRApply never asks the GP to enclose additional reports and supporting evidence and yet still provides a final underwriting decision in 65% of cases.
Customers today expect instant fulfilment through a quick and easy buying process. To meet this demand for the industry as a whole, we need to adopt a different mindset and stop routinely requesting hospital reports to supplement the GPR. We know from our research that most hospital reports add no value to the underwriting process and therefore we just need to let go of our comfort blanket.