Insurers are wasting £60m a year carrying out medical tests for policies that are never written, a health specialist has reported.

Analysis of ABI figures showed that insurers spend £15m on medica ...

Insurers are wasting £60m a year carrying out medical tests for policies that are never written, a health specialist has reported.

Analysis of ABI figures showed that insurers spend £15m on medicals for non-standard applications, often replicating work already done by another insurer, it claimed.

Another £45m was estimated to be spent by insurers processing applications.

The figures were produced by critical illness and life specialist Special Risks Bureau (SRB).

SRB executive chairman Garry Heath said: "It's mostly a case of multiple applications. They are all doing the same work, over and over again.

"But not only are they wasting a whole lot of money, they are slowing down the whole process."

Only when the last insurer had decided whether or not to quote would the broker be able to decide where to place the risk.

Brokers were also losing "tens of millions of pounds" in the same process, Heath said.

The £60m figure was the result of multiplying the number of complex critical illness or life policy applications by £62, the cost of a medical examination.

Heath said that nearly 930,000 of the 3.1 million UK policy applications were more complex than average, but could eventually be placed.

Of those, 414,000 were non-standard risks such as people who had suffered heart attacks had type two diabetes or worked in a hazardous occupation and 45% of the risks would never be placed.

SRB claims to avoid the inefficiencies of multiple examinations by organising one medical examination and placing the risk often with specialist underwriters.

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