INSIGHT December 10, 2020

Simplifying our underwriting process to improve Member experience

Underscored by our quest for continuous improvement and innovation, PPS Mutual has made a number of changes to our medical and financial underwriting requirements in order to optimise our Member experience.

The changes, which streamline our application process for some Members across some of our products, have been introduced to save our Members both time and money, while maintaining our commitment to responsible and sustainable underwriting by ensuring no additional risk has been added to our risk pool.

As the only insurer in Australia specifically for professionals, we have a strong understanding of the unique risk profile of this group, and as a mutual insurer, we exist only to serve their best interests, and can be flexible and responsive to member needs. These recent changes form part of our ongoing commitment to continue to tailor our approach to serve the best interests of our Members at all times.

In our approach to assessing Member health and wellness, we have removed the quick check medical requirement for prospective Members aged 35 or under who are requesting income protection up to a sum insured of $15,000 per month. We have also removed the need for Members of any age applying for life insurance of up to $25 million, total and permanent disability insurance of up to $5 million, Trauma insurance of up to $2 million and Income Protection insurance of up to $30,000 per month to undergo testing for Hepatitis B, Hepatitis C and HIV.

Additionally, when assessing a potential Member’s financial situation, we have removed the need for those applying for Income Protection insurance to complete a full financial questionnaire, and will now only request information that is relevant to the risk assessment. We have also taken the decision to remove the requirement for third-party sign offs on financial questionnaires for Members wanting to insure for Income Protection in excess of $30,000 per month.

All of these measures have been designed to reduce the Member application process by several weeks, minimising the time burden on our Members and saving them money. They will no longer need to spend time verifying their health or financial details with other professionals or incur any costs involved in doing so, such as having an accountant, bank manager or other finance professional sign off on their financials. And while the cost of quick check medicals is borne by us, by reducing the number of quick check medicals we pay for, we will lower our operational costs and any resultant savings will ultimately flow to our Members through our unique Profit-Share arrangement.

These changes came about after we undertook an extensive study of all quick check medicals received since we began trading in Australia, due to the rising costs of these assessments, which ultimately impacts upon the amount of profit we have to return to our Members. We found that getting these medicals represented a poor use of time for our Members, who are all busy professionals, and they held very low predictive value from an underwriting point of view.

Additionally, we had noted that the longer an application sat in pipeline, the lower the likelihood of completion, signalling us to take a closer look at the amount of transactional friction in our underwriting process more broadly.

Our decision to remove the screening requirement for Hepatitis B and C, and HIV, was carefully considered and made to save our Members time, while having no negative impacts on our risk profile. Many of our Members working in medical and allied health fields are regularly screened for these conditions as a requirement of their occupation, and this move brings us in line with standard practices in the Australian life insurance market.

In conducting a similar review of our underwriting book considering our financial risk profile, we found no additional insights were added by the requirement for full questionnaires for income protection or from third-party sign offs. The changes to our financial underwriting requirements will help to smooth the application procedure for prospective Members, or those requesting a change in their cover, bringing us closer to a one-step application process.

 The decision to remove underwriting elements that were not necessary for reducing our risk will not be the last change to our underwriting processes as we strive for continual innovation, improvement and efficiency.

Our guiding principals are, always have been and always will be, evidence-based, and we will continue to seek feedback, analyse our processes and customise our underwriting methodology, responding quickly to the needs of our Members while maintaining a sustainable approach to our overall risk profile.

Marcello Bertasso

Head of Underwriting & Claims Management | Member of management team