Customers finding that insurance systems are making it more difficult to be accepted, according to one Australian life insurer.
A three-year study by Life Insurance Direct found that it is now harder to obtain life, income protection, trauma and total and permanent disability (TPD) insurance than in the past.
Between July and December 2012, the overall success rate for customers applying for life insurance was around 80%. Three years later, this figure had dropped to almost 76%.
Russell Cain, CEO at Life Insurance Direct, said: “What the numbers tell us is that people are less insurable now than they used to be. But the real question is – why?
“What we have noticed is that, over time, life insurers have embraced the use of electronic applications to make it quick and easy for insurers to detect certain risk factors and reject people on the basis of those risks.
“If, for example, the person applying for insurance has a certain pre-existing condition, the computer can automatically reject the application. It’s just a simple matter of programming.”
He said the effect on insurers’ bottom lines is leading the industry to tighten up.
Cain adds: “What all this means in plain English is that we believe insurers are looking more closely at your health, occupation and pastimes before they agree to insure you.”