Providing insurance for pre-existing conditions

Diagnosis details

Dr Helmy El Tanahy, Chairman of CONNEX Assistance, told ITIJ: “Coverage can be provided, depending on the details of the case, as there is a difference between a diagnosis whose outcome results in an unexpected emergency while travelling, as opposed to a diagnosis which is a direct and unavoidable result of the pre-existing condition being left untreated.

“For example, a patient could have hypertension, and have a cerebral haemorrhage as a result while travelling. This would be treated as an emergency even though the cause is due to a pre-existing condition. This is because a cerebral haemorrhage is an unexpected result of hypertension, which is a common illness.

The proportion of the population with at least one long-term health condition is high, and is expected to keep rising

“However, if a patient has been diagnosed with a cerebral aneurysm, and this aneurysm ruptures causing haemorrhage while travelling, the patient is at fault for having postponed treatment of the aneurysm, as a haemorrhage is a direct and unavoidable outcome of this diagnosis.” In terms of what information is reasonable to obtain from the customer, Dr Paul Beven, Strategic Advisor at Verisk Analytics, explained to ITIJ: “The main guiding principle is that the insurer should only ask questions it is reasonable for the customer to be able to answer. For example, in the case of cancer, has the tumour spread to the lymph nodes or beyond, how long ago was the cancer active, or what treatment are they currently having?

“The insurer aims to discover the likelihood of the cancer causing a problem over the duration of the policy. They aim to be as accurate as possible without asking for information that is too detailed or likely to lead to an unreliable response.”

The wider picture

But in what ways do pre-existing conditions affect insurance policies around the world? Dr Cai Glushak, Chief Medical Officer, North America at AXA Partners, explained the wider picture to ITIJ.

“How pre-existing health information applies to underwriting and policy interpretation varies widely across the globe and market segments,” he said. “Some schemes do not consider this information at all in determining if and at what cost to sell a policy – namely corporate travel and expat policies and higher-end bank products. At the other extreme are schemes that consider all medical conditions, even going back to birth.

“While most of us in assistance simply wish to get on with addressing the customer’s needs, we have to respect the terms of the policies, applying the definitions to the clinical information we have at hand.”

Vast improvements have been made in this area over the last three decades. Beven outlined the process that has evolved to help insurers and other policy sellers manage pre-existing conditions. He told ITIJ that in the 1990s, travel insurance was sometimes sold without the customer or perhaps the selling agent understanding the finer policy details around pre-existing conditions. This could lead to difficulties when a customer made a claim that the insurer felt was invalid. A process was therefore developed that insurers could use at the point of sale to allow customers to declare their medical conditions so that insurers could assess them and offer terms for inclusive cover where possible.

In 2022 alone, Verisk’s risk rating tool was used in 25 million risk assessments globally.

Beven said: “Over time, as insurance sales began to take place over the phone, and then online, it became progressively easier for policy sellers to offer cover inclusive of medical conditions in the policy application journey, and to signpost customers to other providers where risk fell outside an insurer’s appetite.

“Alongside this, we have seen consumer protection regulations put in place in many areas around the world with a focus on fairness to customers and the need to offer suitable policies which meet their needs.”

The main guiding principle is that the insurer should only ask questions it is reasonable for the customer to be able to answer

Key challenges

Further challenges come into play for underwriters when defining the exact details of policies for complex medical condition cover.

These are outlined by Andrew Isherwood, Head of Service Delivery at Charles Taylor Assistance’s client Millstream Underwriting and Nexus Europe (UK branch).

He told ITIJ: “There are three key challenges to providing complex medical condition cover: understanding how well controlled the condition is, understanding how well the customer is at the point of travel, and assessing the risk of undiagnosed conditions.

 “Conditions may sound serious, but if the customer’s health is stable and the condition is well controlled through medication or lifestyle changes, the risk may not be as difficult to cover.”

For those with advanced cancer who may have a terminal diagnosis, travel insurance can be almost impossible, with some providers quoting very high figures that are out of the reach of most.

Dr Krish Shastri, Director of InsureCancer and Chair of the Travel Underwriters Group, specialises in providing travel insurance for children and adults with advanced and terminal cancer. He has developed a pioneering, award-winning insurance risk assessment and underwriting methodology for cancer patients with advanced cancer that has spread to other organs such as the liver or lungs, who are therefore coming to the end of their cancer journey.

Shastri said: “Terminally ill cancer patients are unlikely to get cover anywhere else in the market. InsureCancer is therefore unique in the UK, if not worldwide.”

He explained that travel insurance in the UK is very competitive and almost all providers use the Verisk automated screening tool. For patients with a low-grade cancer, this can be helpful as they receive multiple wide-ranging quotes from price comparison websites, Shastri says.

However, self-screening is problematic for patients with complex medical conditions, as box-ticking errors can result in claims being rejected on the grounds of incorrect disclosure. Advanced cancer is complex and therefore InsureCancer does not use screening, preferring to obtain the patient’s medical information from the attending oncologist and clinically underwriting each case. This eliminates the possibility of inadvertent declaration errors by vulnerable patients and gives customers ‘certainty of cover’ at a time when they need it most.

In the new era of Consumer Duty, InsureCancer’s approach is demonstrably fully compliant with the requirement to protect vulnerable customers from foreseeable harm, whilst recognising their needs and ensuring good outcomes. In this context, reliance on self-declaration for vulnerable customers with complex medical conditions can be awkward for insurers at a time when the Financial Conduct Authority (FCA) is becoming more assertive and muscular in its approach to regulatory enforcement.

Automated underwriting

Automated screening is a major advance in travel insurance coverage for pre-existing conditions. Greg Lawson, Head of Travel Insurance at the Collinson Group, with travel insurance brand Columbus Direct, gave ITIJ his thoughts on the benefits and disadvantages of automated medical underwriting.

He said: “Automated medical underwriting should streamline travel insurance sales and increase access for more people with relatively significant pre-existing conditions. But it may not be suitable for the most complex or unusual conditions or where there are multiple interlinked conditions of a serious nature.

“The benefits are generally in the areas of efficiency and accuracy. These systems use algorithms to analyse medical data, which can reduce the risk of human error in assessing the risk associated with pre-existing conditions. Automated underwriting also improves consistency for all applicants; it also reduces costs.”

Accurate advance screening is important but relies on the memory of the purchaser as well as a full understanding of their medical history and risk factors

On the other hand, Lawson said: “It is, by nature, more generic and less reflective of certain lifestyle factors that a human assessment may factor in. There is also the challenge of appearing fair and professional to those who have to live with serious medical conditions.”

Overall, he believes: “Automated underwriting should be easier, quicker and cheaper to deploy. However, the maintenance of a medical condition database, keeping up with both e-commerce as well as health and equality regulations, an accessible user experience and also data privacy/cyber security are all critical concerns when handling sensitive medical information in automated underwriting processes.

“These sometimes mitigate the expected cost efficiency but most brands want to offer an online sales process and that needs 24/7 medical screening that only automated can deliver.”

Jo McCauley, CEO of Southern Cross Travel Insurance, based in New Zealand, agrees on the point about accuracy. She explained to ITIJ: “By using global data and insights, insurers are much more able to make accurate risk judgements than, say, adopting a manual underwriting approach to each scenario.

“This is particularly useful when you’re operating in a smaller population country like New Zealand, where there may be less representation of a condition, or when dealing with a complex and rare condition which may require input from international medical experts to fully assess.”

She added: “The combination of automated process and global insights enables insurers to offer more customers cover, allowing them to travel with confidence.”

Expect caution

Could automated underwriting lead to more cautious outcomes? Isherwood feels this may be possible, “especially when considering factors like the level of condition control, health at the time of travel declaration, and undiagnosed conditions”.

“It relies on algorithms and predetermined risk scores, which can lead to conservative assessments,” he said. “In recognition of this, our process is not fully automated. We use Antidote, the automated medical screening tool from Charles Taylor Assistance – and, to address the caution inherent in automated underwriting, we (like many insurance providers) adopt a hybrid approach.

“When Antidote tells us that an applicant’s risk score exceeds a certain threshold, we offer a medical consultation service. During this consultation, a nurse or medical professional discusses the applicant’s condition with them, similar to the traditional approach of assessing medical history. This allows for a more informed decision by underwriters on whether to offer coverage and at what premium.”

Antidote was described in more detail by Nadeem Sheikh-Ali, Charles Taylor’s Senior Assistance and Client Services Manager. He told ITIJ: “Antidote plugs into an insurer’s existing policy sales system, which gives customers a seamless interface, and it provides underwriters with a consistent and measurable score-based system. This enables them to assess medical risk quickly and accurately.

“Antidote also allows underwriters to set their own medical risk thresholds and to combine its automated capabilities with human expertise to reach fully informed decisions on customer cover.”

Glushak offered some insights into how automated algorithmic underwriting is applied. He said: “Automated medical underwriting poses a different set of challenges. It may eliminate some prospective purchasers considered high risk ahead of time. However, it generally makes the cover decision process more complex and protracted.

“When the declared conditions are immediately available to the medical team (not always the case) and it shows a positive relationship to the acute condition, it can make a cover decision rapidly.”

Overall, he added, accurate advance screening is important but relies on the memory of the purchaser as well as a full understanding of their medical history and risk factors.

The current situation offers travellers more opportunity than ever for financial protection in the face of unexpected medical emergencies. It is increasingly possible for these customers to travel knowing their specific health needs will be met.