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The insurance industry needs to develop better signposting and standards in the travel market, particularly when it comes to providing cover for those with pre-existing medical conditions (PEMCs), according to a specialist provider.
In response to calls from The Money and Mental Health Policy Institute last week urging the Financial Conduct Authority (FCA) to formally review whether travel insurance pricing is fair for those with mental health conditions, the managing director of a travel Insurance and schemes provider told Insurance Business that the more prominent issue is around accessibility.
“I think the problem is one of definition – what is meant by fair? A fair premium is one that is relative to the risk that the insurer is being asked to underwrite,” said Peter Hayman, MD of PJ Hayman, which offers a travel insurance scheme for people with medical conditions, Free Spirit.
Hayman pointed to previous calls highlighting the difficulties for people with cancer in securing travel cover and said that the regulator had ultimately moved to look at signposting.
“The charity is asking for the FCA to look at fairness, and indeed that to a degree is where the original Macmillan approach came from, but the FCA then moved over more to [looking at] accessibility, because I think they recognised that you can’t draw a line in the sand and say ‘that’s fair, and that one is unfair’,” he said.
“It became obvious that the issue wasn’t just about those with cancer, it covered a wide range of health conditions, and people were having difficulty not necessarily being able to get cover, but finding out who could provide the cover. It was as much about the adequacy of the industry signposting.”
The British Insurance Brokers’ Association (BIBA) is currently working alongside the FCA and other industry stakeholders on a better system of access for customers with PEMCs to specialist travel insurance providers, which Free Spirit is involved with.
But the industry should also adopt improved standards to help customers with PEMCs better understand what does and doesn’t need to be declared, according to Hayman.
“I certainly have advocated for some time that there should be an industry standard declaration… an insurer can then develop that into a longer discussion if they want, but for something as fundamental as a pre-existing condition, it would be good to have an understood form of words so that people will get used to considering it before they book their trip and buy their insurance,” the MD said.
Hayman also suggested the creation of an official directory of specialists that would require providers to meet certain criteria to qualify.
“Our view is that there should be an ability to quote for practically all risks that are presented to be qualified as a specialist,” he said, adding that Free Spirit quotes an average of 96% of enquiries received.
While a significant proportion of travel business is now conducted online, Hayman said those with PEMCs are likely to still want to engage with a broker or talk to their provider over the phone.
“People with more serious conditions will invariably want to talk to somebody, rather than just go through the online process,” he said. “While question sets are typically quite easy to go through, there’s still the interpretation around some of the questions and answers.”
