The battle to find meaningful insurance cover for people with diabetes has been going on for more than six years, led by the charity Diabetes UK.
It seems it has finally made the initial breakthrough it was hoping for just in time for National Diabetes Week, which runs this week.
Diabetes UK has signed a partnership agreement with insurance broker Heath Lambert Group to provide a range of insurance and financial services products specifically designed for people with diabetes. Under the agreement, critical illness (CI) insurance will be available to a far wider range of people with diabetes than ever before.
Securing some sort of CI cover has been one of the prime objectives for Diabetes UK's affinity product manager, Jo Martin, in her three years with the charity.
Up until now, underwriters would display a level of interest, then get to a certain point in the negotiations and get cold feet. This is an understandable reaction, according to Martin, as a lot of insured conditions under a CI policy are complications of diabetes.
“To me, this means these people need cover even more but, to insurers, it sounds alarm bells,” she says. “Insurance is all about peace of mind, and people with diabetes need that as much as – if not more than – any other person.”
In August last year, the charity set about finding an insurer or broker that would not only be able to provide the basic insurance products, but also more fair and appropriate travel insurance, and perhaps even crack the problem of CI and life assurance cover.
Bespoke solutions
What Diabetes UK wanted more than anything was to concentrate the buying power of a lot of business with one supplier. With that, they wanted to influence the industry.
Heath Lambert Group was one of ten companies vying to win the Diabetes UK account. Martin said it was the broker's understanding of how the needs of people with diabetes differ, along with its ability to provide the bespoke solutions needed.
Mike Hibling, Health Lambert's UK national servicing director, knew the company had to come up with some specially tailored solutions. He says: “We had to challenge the existing culture that people with serious health conditions, such as diabetes, were poor risks.”
A bespoke approach to handling customers' enquiries was needed, so call centre staff were trained by Diabetes UK, ensuring they fully understood the issues concerning diabetes, and were able to deal with each case sympathetically.
Of equal importance was the negotiation with insurers to discuss the option of using a common application form. Up until now, applicants have had to fill out countless forms with different insurers and undergo a number of medicals.
Getting appropriate, comprehensive travel cover had been a particular problem for people with diabetes. In some areas, insurers were uncomfortable offering them cover and Heath Lambert had to urge them on.
Overcoming prejudice
It was down to financial services director Brian Morgan, though, to tackle the thorny issues of CI and life assurance. “To go to any insurer and get the products that Diabetes UK wanted, such as life and CI, seemed an impossible task. The prejudices and concerns that exist over people with this potentially life-threatening condition are such that it is not an easy proposal. I didn't want to over-promise and under-deliver,” he says.
“It was a case of getting insurers to accept that some of the pre-conceived ideas about diabetes were old-fashioned and that they can't just keep looking back at the past 30 years. They need to recognise that, while there are some groups of people with diabetes that cannot be covered, there are others that are now relatively low-risk and should be covered.”
The progress in diagnosis and treatment means people with diabetes today are living longer and better lives, are aware of their conditions earlier and can therefore control many factors that can lead to associated illnesses.
One of the big areas of difference between the insurance market and Diabetes UK is over the various types of diabetes and which holds the most risk. Insurers tend to favour Type 2, or late onset, diabetes, believing that because people with Type 1 (early onset) diabetes are insulin-dependent, they pose a greater insurance risk.
Martin disputes this. “Type 1 is diagnosed early and, if it is being controlled and is under supervision, associated illnesses are less likely to develop. Type 2 may have been undiagnosed for nine to 12 years, and then might only have been picked up through the development of an associated illness,” she says.
“Regardless of the type of diabetes you have, anyone can reduce the risk of developing complications if they maintain good control. People with both types of diabetes are much more in tune with their bodies and know what is going on – they have to be.”
Just the beginning
The major breakthrough for Diabetes UK came when it was discovered that the chief medical officer for one of the insurer panels had diabetes and had immediate sympathy with what Heath Lambert was trying to do.
For the first time, many people who would have previously been excluded will have access to some form of CI cover on a stand-alone basis. However, Heath Lambert and Diabetes UK admit they cannot get cover for everyone. There will always be some risks insurers will not be willing to take on, such as people with diabetes who smoke.
It's the start of a long road for Morgan. He believes that, by taking on the tough task of lifting exclusions and working with the insurance market in a sensible fashion, Heath Lambert and Diabetes UK can do something that is ethically and morally sound, and do it on a commercial basis.
Diabetes UK also sees it as a beginning. Martin says: “There are 1.4 million people with diabetes in this country, and that figure is set to double by 2010. I think it will come to a point where others will have no choice but to follow.
“We don't want to stop at what we've done. We want to keep pushing the boundaries on all these products. If the loss ratios look good, then we can look forward to seeing prices going down and the cover increased.”
Diabetes UK is looking to put some funds into getting more recent, accurate research and reports out to the market.
“If the industry was using accurate and up-to-date information, making fair assessments and there was no prejudice, then I would be happy to be out of a job. I'd go home and retire at 30,” she says.
