Britons seeking to claim or get cover are heading into a “perfect storm” of poor service and processing delays, thanks to inadequate underwriting and persistent delays in GPs submitting medical forms to insurers.
This is according to several financial advisers and protection specialists, who have said the situation is getting worse, not better, despite the advent of improved technology, software upgrades at the NHS and AI enabling greater automation.
Getting reports back from the NHS can still take weeks – or even months – meaning people are left without cover, or left waiting for their claims to be assessed and processed.
The problem is prevalent across the UK, not limited to the more densely-populated south-east.
According to David Stirling, IFA at Belfast-based Mint Wealth, the turnaround times on GP reports is “ridiculously long”.
He told FT Adviser: “Clients are frequently left waiting months to get a response from their GP in order to get accepted, or not, for protection.
“GPs do not seem to see the seriousness of delaying this process should a client suffer a death, critical illness or require an income protection claim in the interim.”
As reported in FT Adviser in 2024 the government had announced plans to enable full medical records, doctors’ letters, and test results to be accessible via the NHS App.
At the time, the hope was this could circumvent waiting for GP surgeries to send back reports, a process which sometimes takes months and results in policies never being taken out, or not being taken out on time.
But little progress on this front has been made, the situation has not improved – and often GP reports carry an admin or handling fee, adding insult to injury.
As reported previously by FT Adviser, it is not that GPs are unwilling to help – they are simply overburdened. GPs are often struggling to cope with the raft of paperwork request from schools, social services, the DWP and insurers – on top of their day job.
Moreover, the rise in use of digital records has been a bit of a double-edged sword, as some requests from insurers can result in forms of 100 pages or more being sent across from GPs, and underwriters have to sift through pages of often irrelevant information to assess each case on its own merits.
Alan Lakey, founder of CI Expert, said: “The situation is untenable. The few [claims] I have been involved with were sufficiently slow that compensation was paid.”
How do you address the lack of underwriters?
But GPs are not the only culprit. According to Lakey, there is a lack of underwriters and claims managers compounding the problem.
He said: “I was told recently by one insurer that there was a tailback of 39 working days to assess a GP report.”
Lakey added: “We continually hear about a lack of both underwriters and claims managers.
“Add to this the laid-back approach of surgeries to the importance of GP reports and you have the current situation in a nutshell.”
Commenting as a member of the Protection Distributors’ Group, David Mead, director of Futureproof, agreed there were “severe delays” at some providers, due to a lack of trained underwriters.
He told FT Adviser: “It is a perfect storm. We are told there is a shortage of underwriters and it seems the best ones are as sought-after as great footballers: they are being lured to other providers and commanding high salaries.”
Who is hiring underwriters?
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According to recruitment sites such as Glassdoor, there are 165 vacancies for underwriters being advertised this November.
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Totaljobs is citing 339 underwriter jobs currently vacant, in London and within a 10-mile radius around the capital.
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Vacancies hit a peak in 2021 with more than 2,000 underwriter roles being advertised that year, according to VacancySoft, which in its 2022 research said some companies were embarking on a hiring spree post pandemic.
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Its 2022 study said: “New vacancies at Aviva [in 2021] experienced explosive growth, with jobs for underwriters up 363 per cent year-on-year.”
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But earlier this year, the Chartered Insurance Institute said only 7 per cent of young people it surveyed had ever considered a job in insurance.
Mead said part of the problem was the rise in complicated whole-of-life policies which are being requested following the 2024 Budget’s proposed changes to the inheritance tax treatment of pensions.
This is exacerbating backlogs at many companies, who are actively seeking to hire and train underwriters but the process takes time — in some cases it can take 18 months to hire specialist underwriters.
He warned: “This has been going on since the pandemic and clearly there is potential for significant harm.
“How does this fit together with consumer duty? How will this help us close the protection gap?
“We are all working hard at the PDG to encourage wealth advisers to write more protection, and these delays are not very encouraging.”
Technology answers needed
In 2023, Ian McKenna, founder of FTRC, told FT Adviser of issues where families have been left facing huge debts, simply because GP surgeries have taken weeks — even months — to return forms to insurers.
Two years later, he commented: “It is disappointing that we do not appear to have seen any real improvement in turn around times from GP practices.
“Indeed we have has some anecdotal evidence that since GPs have started being paid in advance for these reports if anything turnaround times are in some circumstances deteriorating.”
He said life insurance reports should be seen as a priority, because the problem is that the person trying to get the cover needs to protect their families, or worse still, a survivor is relying on a payout on a claim.
“In these cases the consequences and consumer detriment can be very real”, he said.
McKenna hailed the wide implementation of electronic reporting across the insurance industry, which can make it much easier for surgeries to respond to these requests.
However, he added: “Still things do not improve. People dying without cover, leaving their families destitute really does happen, and more often than some might think.
“Just as bad, we see situations where pay outs to families in desperate need are delayed, because the medical professionals have not responded.”
He suggested that the FCA and the British Medical Association could join forces together to improve the situation.
