A year ago the Financial Conduct Authority (FCA) called for insights on access to travel insurance particularly when it comes to both former and current cancer patients. Now the regulator has published its feedback statement after receiving 64 written responses from large insurers, trade bodies, specialist providers, and consumer organisations.
“Most stakeholders accepted that it could be difficult for consumers who have, or have had, cancer to find affordable travel insurance,” the watchdog said in its feedback statement. “There were differing views as to why this is the case. There are a number of complexities, for instance, to assessing the various risk factors in combination with ever-evolving medical screening tools.
“The responses showed that the travel insurance market appears to be segmented between mainstream and specialist providers. Mainstream providers had a limited appetite to insure more serious medical conditions. Specialist providers were prepared to insure consumers with these conditions even with terminal diagnoses.”
The report shone a spotlight on the issue of signposting, noting an apparent lack of high-quality information on options available to consumers following a high quote or cover refusal. “This can, incorrectly, cause consumers to assume that they are uninsurable,” said the FCA.
In addition, the gathered views pointed to a lack of transparency around how premiums are calculated and the risk factors that drive quotes – making it difficult for prospective policyholders to understand whether the quote was a true reflection of their condition.
“There were also responses that highlighted premiums quoted by these specialist providers were usually, in some cases with more granular medical risk assessments, lower than the mainstream providers,” noted the regulator. “Consumers often were unaware of the lower premiums offered by specialist providers.”
To bring about a positive outcome for consumers, the FCA said it will be working with key stakeholders to implement a new signposting service. This will address consumers’ difficulties in finding competitive and appropriate insurance brought about by the lack of awareness about the alternatives.
A welcome development
Following the release of the FCA report, the likes of the Chartered Insurance Institute (CII) and the British Insurance Brokers’ Association (BIBA) have shared their thoughts – committing to work together towards the goal of making travel insurance more accessible to consumers with pre-existing medical conditions.
“We welcome the regulator’s call to improve access to insurance for people with cancer and other health problems,” commented Melissa Collett, professional standards director at the CII. “One in three people living in the UK are likely to get cancer at some point in their lives and it is absurd that this large group are prevented from travelling because they cannot get insurance or, worse, forced to risk travelling without it.
“Many people living with cancer and those in remission live healthy and full lives and we should be doing all we can to support them in this.”
Travel Insurance Facilities Group (tifgroup) managing director Richard Smith concurs, adding that the current signposting service is not targeted enough and that hopefully its limitations are taken into consideration when launching a new service in order to effect real change.
“We are pleased and encouraged that the FCA has listened to the travel insurance profession and has found that change across the industry is needed so it can be more inclusive in its approach to offering cover for those with medical conditions,” said Smith, whose firm is among the largest travel insurance providers in the UK.
BIBA, for its part, vowed to work with the watchdog and other industry stakeholders. Currently the trade body runs what it described as “a successful Find-A-Broker Service” which saw its specialist provider members receiving over 550,000 enquiries in 2017.
“We have been calling for wider signposting in our Manifesto to help customers and improve financial inclusion,” said BIBA executive director Graeme Trudgill. “We have long identified that the biggest challenge is awareness and that more providers need to actively engage in signposting.
“We believe that BIBA has a leading role to play because we have specialist insurance brokers in our membership with the insurance solutions that customers need, and improved signposting will enable more customers to access cover.”
Trudgill, whose association has engaged with Macmillan Cancer Support, thinks BIBA is “well placed” to share its knowledge and experience to help establish a service that incorporates the whole market.
“The sector needs to work together to find solutions for customers who have different needs, and improving signposting would help enable more people to be covered for the moments that matter,” added the CII’s Collett.
