Service levels among group risk providers have improved, but some issues remain over the accuracy of quotations given to employers, and account management.
Mercer’s bi-annual Group Risk Survey, based on data taken between November 2008 and May 2009 to analyse the performance of 11 group risk insurers, showed progress had been made, but there was still room for improvement
Accuracy levels of accounts averaged just 74%, and there was a marginal improvement in the accuracy of quotations received. In May 2009, the accuracy level was about 82%, up from 80% in the same survey period last year.
The average turnaround time from the submission of an income protection claim by an employer to the decision has also improved.
There was a 9% improvement in the time it took insurers to request medical underwriting information after receiving an initial declaration of health form, with the process now taking an average of two-and-a-half weeks. In May 2008, the average was just under four weeks.
This is a clear indication, said Mercer, that the ‘once only’ underwriting is having a positive and measurable impact on the medical underwriting process. This means that once an employee has been underwritten, future increases in benefit will not be subject to further underwriting.
David Manning, principal in Mercer’s health and benefits team, said: “We are pleased there is a general improvement and hope those that pull the market average down will see the competitive value in improving service levels.”
Meanwhile, Group Risk Development (Grid), set up in 1998 to enhance the status and uptake of group risk benefits, is currently drawing up a set minimum service standards, which will focus on a number of administration and service issues. It will seek to establish a minimum turn around time for triage checks and quotes, as well as for the receipt of deposit invoices and renewal notices.
Katharine Moxham, a spokesperson for Grid, said: “Unless the policy is specifically cancelled then the cover continues over that renewal period. This is both a blessing and a curse.
“Although, it’s great to know that your cover is still in place and you don’t have to worry too much about it, some of the service issues that we have experienced as an industry directly resulted from the fact that there has been, until recently, no real impetus to get things done and dusted by the renewal date in the same way that other insurance markets operate.
“Typically large group risk schemes, operate by half-rate adjustment, which basically pretends everything that happened took place half way through the policy year. Sometimes this works to a client’s advantage and sometimes it goes against.”