This article is by Gary Murphy, travel insurance expert, Gigasure
Undisclosed medical conditions are one of the biggest and longest-standing challenges within the travel insurance industry. Financial Ombudsman Service data shows a 19% rise in travel insurance customers who have had their insurance claims rejected because pre-existing medical conditions had not been properly disclosed, either intentionally or not. Our own research found that 24% do this through fear of increased premium cost, 18% not being clear on what to declare and 19% thought that certain medical details were not relevant.
Failure to-disclose medical conditions can result in a holidaymaker receiving either a reduced proportionate payout or declined claims altogether, often leaving the individual responsible for large medical bills to cover medication, hospital stays, and repatriation costs which can quickly run into tens of thousands of pounds.
We often see stories in the media of holidaymakers stuck in foreign countries with hefty medical bills to pay. While I wouldn’t like to generalise, more often than not these situations occur because the traveller didn’t disclose all their necessary health information. When this happens the insurer may not be able to pay a claim in full leaving many forced to borrow money from friends and family or resorting to crowdfunding to recoup the costs.
The non-disclosure of medical conditions has been an ever-growing issue in the industry for many years. But it is one which could be improved across the sector by embracing the benefits of technology. While further education and awareness is needed to help consumers fully understand the impact of failing to disclose relevant medical information, the industry also has an opportunity to innovate and prevent claims issues happening in the first place.
Removing confusion
Whilst customers should ensure they understand what medical conditions they have when applying for a policy (checking with their GP surgery if necessary), Insurers should be exploring ways to make medical declarations easier to understand and simpler to complete. Medical screenings can be lengthy with language and terminology which could confuse some consumers, particularly individuals with multiple or complex conditions. A simpler, more intuitive screening process that gives clear language and smarter prompts could help.
This will help avoid people skipping details that they think may not be relevant to them. This approach aims to reduce the risk of accidental non-disclosure and the frustration of finding that they are unable to make a claim when they need to. It would also go a long way to reducing the volume of declined claims and improve outcomes for both consumers and insurers.
The goal should be to make it easier for customers to provide accurate information while giving them greater confidence that they have the cover they need.
Better use of medical data
Evidence shows that one of the main barriers of non-disclosure is confusion with exactly what information is required from insurers. To help resolve this issue, insurers could (with the customer’s consent) engage with health partners to access a customer’s medical records. Initially this could be done at the claim stage (to speed up the processing of claims) and latterly at the application stage.
This would help validate declared conditions and help distinguish between well-managed conditions and higher-risk situations, leading to more precise cover and pricing that reflects the customers health profile. This would significantly improve the outcome for both customers and insurers, with insurers being able to move away from high level risk categories towards more personalised assessments which could ultimately create fairer premiums.
Creating a simpler customer journey
Medical circumstances can change between the purchase of insurance and travelling. With this, and a high percentage of people not knowing or remembering to keep their travel insurance provider informed of changes, insurers should utilise technology to send out automated reminders to prompt customers to update any information.
Reminders create a smoother, more transparent customer journey. As insurers explore smarter digital tools, pre-travel health reminders must become a key part of going above and beyond for customers whilst providing great clarity in the process.
Looking to the future
Many travellers are still unaware of the importance of declaring pre-existing medical conditions, but insurers can choose to help this by being more educational and transparent in their approach. With more AI and tech-driven solutions available, it allows our industry to continue evolving by being more customer centric.
The future of travel is about preventing claim problems from happening in the first place. The next generation of insurance should focus on helping customers make informed decisions from the moment they buy a policy, using technology to remove complexity rather than add it.
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