Kathryn: Hi everyone, today I have Matt Rann with me.  He is somebody who has spent I think it’s 42 years as an underwriter extraordinaire in our industry.  Hi Matt!

Matt: Hi Kathryn, thanks for having me.

Kathryn: Ah, it’s lovely to have you here.  Matt’s going to be joining me to discuss how underwriting has changed throughout his career and also chat about the claims process which is something that we’ve not really covered too much on the podcast before so this is the Practical Protection podcast.  So Matt, Christmas is quickly approaching.  Are you all set and prepared?  It’s absolutely thrown me that it’s next week, I have to say, when I realised earlier today.

Matt: Oh my goodness, it’s not is it?

Kathryn: It is.

Matt: Well I think I’ve just given my answer.

Kathryn: Absolutely.

Matt: To be truthful, we’re pretty much there so thank you for asking.  The tree is up at long last.  We didn’t put it up early.  Really it’s just myself and my wife obviously, Theresa, and my two children, who are now 26 and 21 so it’s not kind of waking up at six o’clock in the morning type time anymore.  

Kathryn: Yeah.

Matt: It’s actually that difficult getting them out of bed.

Kathryn: Is it?

Matt: So there you go.

Kathryn: I was going to say, I kind of long for those days but I also don’t long for those days because I’ve obviously got three young children of nine, six and three and so I will be woken very early and it’s that kind of thing as well of trying to – well some of the – trying to wake up one while the other ones rush downstairs.  It’s trying to barricade the door to the room with the presents so the first one can’t just run in and start ripping all the paper off.

Matt: Those were the days!

Kathryn: I know.  I was going to say, I look forward to the sleeping but I know I’ll also miss them – that kind of energetic kind of enjoyment that they have at that age.

Matt: Yeah, absolutely.

Kathryn: So we’re on to – ‘cos this is the last season – last episode, sorry, of season two.  We’re starting season three in 2021 and so we’re going to have what is now going to be the last truth or lie feature on the podcast and that’s where the people from the previous episode have turned around and said something and you have to kind of figure out if it was a truth or a lie, what they’re saying or what I’m saying.  So last time we had Paul and Di from Winston’s Wish and what we said was – is that I said that my favourite thing about Christmas was carol singers.  Paul said his favourite thing was the Christmas party and Di said her favourite thing was chestnuts roasting on an open fire.  So I’ll give you just a little bit to think about – who do you think was – it was probably easier to think about who was lying out of all of those ‘cos it’s only one of three you need to figure out.

Matt: I would say the Christmas party was a fib.

Kathryn: Okay.

Matt: And the – was it chestnuts you said?

Kathryn: Chestnuts – Di was the chestnuts roasting on an open fire and mine was the carol singers.

Matt: Well I have met Di, I have to say, yes definitely I’ve met Di and I can’t think she’d ever tell a fib to be honest with you, she’s such a lovely person but I don’t know who likes chestnuts to be honest with you so I have to say that’s a – that’s a fib as well.

Kathryn: Ah, there is only one liar.

Matt: Oh there’s only one liar?

Kathryn: There’s only one lie, yeah.

Matt: Oh right, in which case it’s Paul.

Kathryn: Paul with the Christmas party.  I was going to say, actually Paul was telling the truth.

Matt: Oh no!

Kathryn: His favourite was the Christmas party, it’s me that was lying with the carol singers.  I don’t do carol singing.

Matt: Oh I can’t believe you wouldn’t tell the truth, especially in your job!

Kathryn: I know, I know!  Well that’s the thing, I get my fibs out on the podcast so I don’t do it anywhere else.

Matt: Quite right too, quite right too.  Oh well, you beat me on that one but that’s interesting, oh wow, what can you say?

Kathryn: That was a good one to end on with the truth or lie feature so I think what we’ll start doing now is – just a good place is to start is just to chat to everybody really about your life.  So as I say you’re in your – you said earlier that you’re in your 42nd year of being in the industry so what was it like for you coming into the industry?  What made you sort of go into the world of underwriting and reinsurance and everything else that you’ve been doing?

Matt: Well thank you for asking that question.  It does seem an awfully long time ago, I think 1979 which – goodness knows what was going on in 1979.  But I’ll be very honest with you, I didn’t wake up one morning and think, “Oh underwriting, what a job!  What a great job to go into!  Insurance, ooh that’s a little bit dull isn’t it?”

Kathryn: Yeah.

Matt: And being born and bred in Cheltenham, Gloucestershire, one of the big local employers with the exception of GCHQ of course, the spy centre so to speak, was a reinsurance company called Mercantile & General, M&G for short.

Kathryn: Yeah.

Matt: And they, as I say, they were a big employer, people from my school or secondary school – quite a few of them had gone there and it seemed a good place to start, no two ways about it.  I think – in fact Eagle Star which was then bought by Zurich were actually in Cheltenham at the time as well but I ended up at M&G and when I got there, being – I think now I’m of the age I can be honest with myself – being quite a competitive person, certainly in sport, if you wanted to get on in that company, being an insurance company of course, there were two jobs really where you would earn decent money and one was an underwriter and the second was an actuary.

Kathryn: Right.

Matt: Actuarial was – even though I’ve got a great love of numbers I have to say, actuarial sounded too much like hard work and really all the exams that you had to do etcetera, etcetera.

Kathryn: Yeah.

Matt: So I didn’t go down that route but I went down the underwriting route and my first actual job within the underwriting department was actually in claims.

Kathryn: Oh right.

Matt: I actually started in claims and only – I was only there for about six months or so but that really was a time which was filled with great sadness, not because of the job itself, as I say, claims was absolutely fascinating which we’ll talk about later on however it was the time of the Falklands War –

Kathryn: Right.

Matt: And M&G had the army dependents’ scheme so we were dealing with claimants that were coming on through that particular scheme and of course a lot of the claims were young men –

Kathryn: Of course.

Matt: Soldiers killed in the Falklands and so on and so forth so we were actually – how old was I at the time, 18, maybe 19 and dealing with death claims on people of almost exactly my age.

Kathryn: Yeah.

Matt: And it was harrowing to say the least.  That was really my first introduction into what insurance is all about.

Kathryn: I was going to say, that’s an introduction and a half, isn’t it really?  I mean, it’s – that’s pretty intense.

Matt: It certainly was and I can assure you there were a few pints drunk each evening after a day of having to deal with these claims just to kind of wind down if you like and get some kind of sensibility back but that was my introduction and then I eventually went off into underwriting and I haven’t really looked back since.  I – 42 years, it sounds an extraordinary length of time but I don’t think I would change anything and I think I’m a very lucky person to say, 42 years doing – not exactly the same job, but essentially the same and I’ve still got a lot of passion for it today as when I first started.  There’s an awful lot to do without any shadow of a doubt still – we haven’t got – the insurance industry certainly haven’t got everything right and that’s one of the reasons of course why I agreed to come on today and talk to your good self.  Obviously, I know it’s another industry but it is very well in terms of kind of [inaudible 0:08:38] world if you like and that, you know, it needs to be done, there’s no two ways about it.  But back in the day – back in the day in terms of reinsurance, for those who are not familiar with reinsurance Kathryn, I know you are very used to –

Kathryn: Yeah.

Matt: These are insurance companies that insure insurers, okay?  So very typically in the UK and it’s developed this way for economic reasons if you like, maximising company profits etcetera, etcetera, that the insurer will take typically on any type of insurance product – life insurance, pure life insurance, critical illness or income protection – the insurer will take actually quite a small part of the risk.  Some companies will take nothing, insurers will take nothing at all and let’s say there’s a case of £1 million as an example, a company – insurer A will take let’s say 990 – sorry, insurer A will take £100,000 and the reinsurer will actually take £900,000 so the people who write – the reinsurers take much more of the – far more of the risk than the insurer.  Now because of that, when I started in reinsurance as an underwriter, we saw a lot of cases often with the medical evidence already attached to the case.  An insurer had gathered the medical evidence and at that particular time, Cheltenham’s M&G – I should have also said London had an underwriting team set up as well with probably something like 60 or 70 underwriters –

Kathryn: Right.

Matt: And all we saw, day in and day out, were people with medical disorders so many, many diabetics, people with coronary artery disease, stroke, multiple sclerosis.  Those would be the primary ones and various lung disorders but all very, very big cases where they needed the expertise at that time.  To give you a bit of – a bit of insight, I can’t honestly remember the exact numbers but we had something in the region of seven or eight chief medical officers –

Kathryn: Yeah.

Matt: Who were consultants in their own right in different areas so in Cheltenham we had a cardiologist, we had a cancer specialist and oncologist, we had a general physician, we had a lung specialist and then in London we had access to their doctors as well so there was someone who was famous that had been in the insurance market in particular – a great, great guy called Dr Brackenridge who in insurance – he’s sadly passed away now but in his day he was probably – well not even probably, he was the best doctor with an underwriting knowledge in the UK if not globally.  If you ever get a chance to read some of his books, please do.  I always remember having the mickey taken out of me something rotten because people couldn’t believe that I took home his books and had them under my pillow to read every night.

Kathryn: Right.

Matt: First, I know it sounds a bit mawkish –

Kathryn: No I love it, I love it – I do a book club and I – and my – with my sister and we did like a Secret Santa thing –

Matt: Oh yes.

Kathryn: And we had to all choose a book for – basically we all put forward our favourite books and the first thing she said was, ‘cos obviously she knew there was someone in our book group that was going to get the book that I chose and she just immediately said to me, “Do not give them Shakespeare.”  I was just like, “But I really like Shakespeare,” and she was like, “Nobody else likes Shakespeare.  Do not give them Shakespeare.”  I was just like, “Okay,” so I’m definitely going to be reading this book because I would love to learn more about the underwriting side and sort of the medical side of things because, you know, we’ve spoken before, you know, I know quite a bit medically but I don’t know to the extent of a medical doctor on a lot of things but, you know, we do have quite a lot of knowledge but I find that really fascinating what you were saying as well about the insurer-reinsurer side of things because especially like when we speak to clients and a lot of people who come to us are quite disheartened by the industry or even angry towards the industry because they’ve been told they can’t get insurance and it’s amazing how many times, you know, you’ll say to them, “Well look, I know that you’ve had that decision but – I know that’s from them but, you know, there’s another level, there’s what’s known as reinsurers,” and I think people kind of hear that word and it’s maybe a word that people have heard but they don’t really understand what it means and it’s a case of, “Well actually, so it’s not sort of – it’s not just this company but they’re kind of held by the rules elsewhere as well and it’s kind of like this massive, complicated network of different decisions,” and sometimes I actually think people find that a bit easier sometimes and it can actually help them to stop being –

Matt: As angry.

Kathryn: Angry towards one particular company because they’re just like, “Oh right, well actually so it isn’t just them, this has actually been a couple of people’s decisions and it’s some kind of set rules that have gone back, you know, for maybe quite a lot of years with the medical information that’s been used.”

Matt: Absolutely.

Kathryn: So I think that’s really fascinating when you were just saying that.  So obviously you were doing all of these bits obviously and I mean obviously you’re already saying from the very start, you know, you’ve been claims, you’ve been into the underwriting – into the reinsurance, I mean – I suppose like a really interesting thing you were mentioning there about like the diabetes and the pulmonary conditions and strokes and things, I mean, what was – ‘cos obviously I know and we’ll chat about now kind of like what everything’s looking at like now in regards to what’s on offer for people but how did the market kind of – and products kind of look like in those – sort of like those original days for as to what was available to people?  Did – was life insurance as accessible as it is now or was it just in a sense different?

Matt: The world has got better with regard to life insurance, there is no two ways about it.  With the enhancement of medical knowledge, the world has moved on and there is a lot more people currently covered these days and there’s absolutely no two ways about it.  I won’t go on but when I first started, I know it was a long, long time ago, but there was something called a blood pressure pool –

Kathryn: Okay.

Matt: And also a diabetic pool so all the cases that were put into those categories would actually go into a certain pool and claims would pay out of that pool of premiums etcetera that had paid into it but that was primarily – I mean, that was created so that the reinsurer – I think – when I say reinsurer I mean M&G Re in this context, could get a handle on whether the underwriting was fit for purpose.

Kathryn: Yeah.

Matt: When I say underwriting is fit for purpose, what I mean by that is that the right decisions were being made and losses were not being incurred.

Kathryn: Yeah.

Matt: Okay, [inaudible 0:16:02] case at standard rates where in fact the 100 cases that went in should have been rated at say two times ordinary rates.

Kathryn: Yeah.

Matt: Well that’s essentially what underwriters do of course.  They try and – they try and match on a [inaudible 0:16:21], they try and give the client a decision which is commensurate with the premiums that have been paid.

Kathryn: Yeah.

Matt: I hope that makes sense?  Did that make sense Kathryn?

Kathryn: Yeah, yeah, no absolutely.

Matt: [inaudible 0:16:34].  Sometimes I get into jargon and I don’t know I’m doing it.

Kathryn: No I think, you know, it’s sort of like, it’s that general thing isn’t it that I think we all have to understand, you know, as I appreciate there’s some times as advisers we can get a bit frustrated with decisions or terms but ultimately the underwriters are there to assess the risk, to assign the risk, to protect – to essentially protect, you know, the insurance company, so they are there to protect the client but they also have to protect the insurance company which is the business that has promised – it’s already made a lot of promises to existing customers and they have to make sure the financial reserves all equal out, you know, and accommodate for the fact that, you know, there may be some people there who possibly are a higher risk and would may be more likely to make claims but then they have to make sure that there’s enough money, like you say, in that kind of now collective pool to make sure that, you know, if there is suddenly lots of claims that they are able to honour those promises that they’ve given people.

Matt: Absolutely.  I mean, I don’t think there is a chance of any insurer – protection insurance company going bust if they were hammered by claims but, you know, you can see from the recent reaction of reinsurers and insurers to Covid that they are – they want to understand that risk better –

Kathryn: Yeah.

Matt: Before they open up the market again as it was before so you’re absolutely right and thank you, you explained it far, far better than I ever did.  When [0:18:04] so hypertension, high blood pressure was a risk that was considered, you know, back in 1971, it was considered to be, “Oh no we’re not quite sure about this, not quite sure about that,” hence why they got – they formed the pool but now there’s hypertension, it’s stocking trade and generally as long as you’re well controlled etcetera etcetera, you will [inaudible 0:18:28] most people can get standard rates, certainly for life insurance.  Now – but that’s how a lot of these – getting data – data is so, so important and getting that data – it allows underwriters to open up the – on various disorders – medical disorders that are out there and provide more cover.  You know, I would say, back in 1979, income protection was – people were – people [inaudible 0:19:05] reinsurance company – reinsurance company, they were a bit worried about income protection because they didn’t know whether it made money or not – is really the bottom line.

Kathryn: Yeah.

Matt: And a very, very long time ago now of course, but once they’ve gathered enough data, real-life experience on their clients or on insurance companies of course, they will realise that with a few tweaks here and there, some sharper pricing depending on the deferred period etcetera –

Kathryn: Yeah.

Matt: Better claims handling – far, far better claims handling, rehab services etcetera, etcetera than it was a product with a design that was also sustainable at the end of the day.  Will they – people should buy it.

Kathryn: Yes.

Matt: An awful lot more.  I would say to you, that my first an insurance product was an income protection policy.

Kathryn: Right.

Matt: It wasn’t a critical – I’ll go on to critical illness in a minute but it wasn’t critical illness and one of the reasons why critical illness – it actually wasn’t around in 1979 in this country.  So moving on, I was very lucky to work with a guy called Dave Grimshaw, an actuary –

Kathryn: Yeah.

Matt: Wouldn’t hold it against him but an actuary and he was a fantastic teacher – still is, he’s still in a similar industry and it was a great insight for me to see him work through the developments of the usual plans, obviously South Africa was around still in those days and they would –

Kathryn: Yeah.

Matt: [inaudible 0:20:49] etcetera and see he developed the product and the pricing for the product.  To understand the pricing of a product actually allows the underwriter far more flexibility in how he underwrites that product, if you understand it and in those days of course there were only five or six disorders although the marketplace is – has moved back a little bit to a short number of illnesses covered and also AIG’s plan which was to my mind a great step forward.

Kathryn: Yeah.

Matt: But understanding the pricing really gives an underwriter so much more knowledge and that knowledge allows them to be more flexible.  When –

Kathryn: I was going to say –

Matt: Sorry, go on.

Kathryn: Sorry, I was going to say, I think one of the things that I’d find really interesting there – ‘cos obviously I know a bit about it but not lots and I imagine there’s a lot of advisers that would be the same as me so can you sort of like explain that interconnection in a sense of what underwriters and actuaries, you know, kind of a very brief thing, this is what an underwriter does, this is what an actuary does and this is how they complement each other in that kind of a sense?  I think that would be really interesting to hear.

Matt: Okay, so at the fundamental level, we are creating the price per risk.  It would take a very long time – [inaudible 0:22:20] mortality, the actuary will consult numerous data models and create a pool.  Now the pool, which I’m sure you know is made up of a few factors – the biggest, depending on the age of the individual, is going to be mortality, the chance of them dying or making a claim if it’s in years.  On top of that, they will put expenses – so that’s the costs of running the business, of paying commission –

Kathryn: Yeah.

Matt: Etcetera, etcetera and they will also add a margin – a profit margin.

Kathryn: Yeah.

Matt: Now all those three things will come into the vision of the actuary.  Underwriters specifically look at the mortality risk in terms of making the claim and the data on mortality out there [inaudible 0:23:30] was in 1979 on basic mortality, how long you expect someone to live blah di blah, but – and the [inaudible 0:23:41] idea how an underwriting impacts that, how an underwriter would expect a risk at standard rates and unfortunately in some instances decline a risk or add a rating and an actuary will take that mortality risk and consult with an underwriter to see whether that is reasonable or not.

Kathryn: Yeah.

Matt: So essentially the actuary will come up with a price with the three things; the biggest mortality generally, I say depending on the age and then the underwriter will come along and it’s almost like rubber stamp – the reality is it’s more a meeting of minds if you want.

Kathryn: Yeah, okay.

Matt: Does that help?

Kathryn: Yeah, yeah it does.  It’s really important to understand that, you know, because, you know, as I say, as an adviser you kind of see these different things sort of like playing about and, you know, we all know that sort of thing about underwriters make decisions, actuaries – I don’t want to say play with numbers but I know they do a lot more than that.  I think that’s – I’m sorry to any actuary who is listening!

Matt: There’s different types of actuaries as well of course.

Kathryn: Oh, okay.  So, you know, I think, you know, it’s interesting to hear how they – how that works together because, you know, we know that they are such an entwined kind of position in many ways even though they are separate so that’s – that’s really, really helpful, thank you.

Matt: Okay.  Well that’s alright.  As I say, that kind of arose from when I was talking about critical illness and –

Kathryn: Yes.

Matt: I was lucky enough to be around when it really got going in this country and also, as I say, talking to Dave – Dave Grimshaw about that development of that product if you like and also, let’s be honest, I talked about income protection a little bit earlier, also seeing or being involved with development of that product as well.

Kathryn: Yeah.

Matt: So as a reinsurer, I was a very, very lucky man to be perfectly honest to you, to be part of that type of product development and interaction between the underwriters and the actuaries in particular and also I shouldn’t forget here of course the claims people who really – in those days, I don’t think we utilised them enough until they gave us feedback on the product and how difficult it was in certain circumstances for them to do their job.

Kathryn: Yeah.

Matt: I will give you some great examples now, you know, if you went into an insurance company and you sat with their team – claims team and you asked, “What are the biggest challenges you’ve got?”  And some of the biggest challenges are trying to assess TPD claims.

Kathryn: Yes.

Matt: Very difficult.

Kathryn: I was going to say, imagine – I’ve heard some very – we were involved actually in a TPD claim that I believe it took a long time and a lot of – it had to go very, very high in the insurer for us to be able to get that sorted for the client but I imagine it is extremely, extremely difficult but it’s – it’s – yeah, it does feel like a very, very difficult claim definition to actually have on a policy and I know obviously now you can pretty much – you can choose with some insurers if you want it on or not and there is kind of a debate as to whether or not to actually include it sometimes.  It’s a bit of a tricky one.

Matt: Yes.  I mean, I completely agree with you and it certainly is tricky.  I remember sitting in a reinsurer’s – one of their seminars and sitting on the panel and, you know, I said, “I don’t think – I’m happy to share it but that TPD is broken.”  It is a very difficult product to claim on.

Kathryn: Yeah.

Matt: And it causes all types of issues at claim at exactly the time you don’t want issues to be caused.

Kathryn: Yeah, of course.

Matt: Somebody is in a difficult position as, you know, the poor old claimant is expecting a pay-out.  I mean, the other one – so what I’m really trying to say there is with TPD – maybe with a bit of forethought we could have thought of doing that in a different way is what I’m trying –

Kathryn: Yeah.

Matt: And the claims people were really the people that had the short straw on that one.

Kathryn: Yes.

Matt: The other one is – without any shadow of a doubt, is terminal illness – incredibly – it can be incredibly difficult to handle those types of claim.  We were talking earlier about the stress on the actual claims team at an insurer –

Kathryn: Yeah.

Matt: That is created from some of the things that they have to do or go through and manage their clients’ expectations.  So those are the things that I wonder if we haven’t quite got right in the industry.  I think it’s Katya at The Guardian’s wrote a good piece the other week about terminal illness and I have to say I completely agree with her on that.  It’s not a benefit that really – I don’t think really helps but do you get a view on that Kathryn because I mean you’re at the –

Kathryn: Yeah.  It’s a very, very difficult one so I mean the main one that stood out for me in regards to terminal illness recently and it’s something that she’s talked about before so I’m not breaking any confidences in this but Lindsay who works with us –

Matt: Oh right.

Kathryn: Unfortunately lost her Mum to a long battle with cancer in February just before everything happened with Covid and they had tried to claim on the terminal illness side of the policy and they were in the sort of like – in a very difficult mindset in the sense of they put the claim forward but they also – her Mum was very much of the mindset she said, “I don’t want to know if I’m terminally ill,” and there was that really difficult – it’s a difficult position.  A difficult position for the claims assessor obviously, the insurer, and difficult for Lindsay and her Mum and Dad because her Mum didn’t want to know if she was terminal because she didn’t want to have to face that even though it was something – she just didn’t want to have it kind of set in stone and – but at the same point, if there was a potential that they could pay off the mortgage then they absolutely wanted to do that as well and I know that it was – it was quite hard for them because they got a decision letter back at the time ‘cos it was turned down for a terminal illness claim last year and it came back as a decline and the letter – I haven’t seen the letter but the gist of the letter was that, you know, basically, “You were terminally ill but now that you’ve started your new medication, you’re probably not anymore.”  

So yay, and that was a, you know, that was very, very hard for Lindsay’s Mum and I can’t imagine how that would have been – I can’t imagine how that could have been easy for the claims handler either and I can’t imagine how they could have worded it in a way that was better.  As I say, I haven’t seen the letter so I don’t know if it was okay or not, the way it was worded.  You know, just, a very, very, you know, it’s almost as if in some ways, you know, the claims team, you know, you kind of think well somehow they probably need to have some kind of, you know, vulnerable client training but then also probably given the opportunity to maybe even have some kind of on-hand counselling for themselves as well just to be able to process what they’re having to say to people because I can imagine that the amount of range of feedback and responses they must get when they give those decisions out from when things aren’t – a claim isn’t going ahead then it must be absolutely horrendous.

Matt: Yeah, it was very nicely put actually, thank you.  You’ve taken the words out of my mouth.  In fact, far more eloquent than my own actually those words.  I completely agree with you.  It’s a very difficult area and it’s an interesting one why insurance companies don’t actually provide those types of help and support for their claims assessors really.  But there we go.  It’s certainly one that I would like to see changed. 

Kathryn: Yeah, I mean I suppose one thing that could be said is that for anybody who’s in – obviously a claim assessor in an insurer is if you check what group insurance is available, you may have some of the value added services and the counselling may be a part of that so it may not be something that you’ve initially thought of or thought, “Oh yeah, they’re not giving me that,” but it may actually be in a sense – in a background system it may be available.  But it should really be something I think that should be – should be there for the claims handlers, you know, for the people who are actually speaking with people that – the most – no matter what, the person who’s claiming is – whether or not it’s a successful claim or not, for them they’re experiencing something extremely traumatic and, you know, and obviously that claims assessor is a person who’s the, you know, they’re the only person that they’re probably going to be getting a chance to kind of vent about whether or not things are going okay or not.  But I know you said as well that your wife’s a claims assessor and so it must be something that you’re – in a sense, you’re quite familiar with as to what’s, you know, the things that she has to face. 

Matt: Absolutely, absolutely and then, you know, to be honest with you, when I was chief underwriter at Aegon, I would look after the claims team as well and we’d spend some time doing those types of – coalface – so I would sit down and listen to the calls with the clients and so on and so forth and actually get physically involved with talking to clients and so on and so forth and it is very, very difficult and I have to take my hat off to all of the claims teams in the UK for the job that they do because 99 times out of 100 it’s a difficult one, there’s no two ways about it.

Kathryn: Absolutely.

Matt: It’s not in the same league as being a business underwriter where, you know, you get – you can get pressures from IFAs and so on and so forth –

Kathryn: Yeah.

Matt: But it’s nowhere near as difficult.  So we were talking about that – sorry Kathryn, were you going to make a –

Kathryn: No, I was just – yeah, I was just going to say the other thing is, just sort of like thinking about it – just thinking of ourselves as well as being a small in a sense, small IFA, you know, it’s, you know, if you have – someone has you as an adviser, you know, then potentially the adviser could potentially be that person who is receiving that as well so I think it’s important to potentially recognise, you know, if advisers don’t have specific claims teams – claims support teams in their advisory firm that it could be the adviser themselves or one of the admin team that is having it.  So for people who’s listening, obviously we’re saying that, you know, it’s something where claims assessors need support.  It could also be as well as if you do have people in your organisation who are dedicated to doing the claims or if it’s yourself as an adviser as well, that to just be very conscious that, you know, sometimes, you know, if things haven’t gone right or if you’ve had that experience before where something’s not gone right for the client in regards to their claim, is making sure that you’re okay yourself afterwards.

Because I think as well as advisers you, you know, you do become – a lot of us become quite connected to our clients and they become friends in some ways and if the claim isn’t successful you can kind of feel as if, “Well, have I let them down?”  And then you know about, you know, their child or their couple of children, you know, that they usually do sports on this day and you can’t ring on that day because that’s when, you know, Grandma’s coming around for playing and they can’t be disrupted and things and it can be really hard because you get emotionally invested and I imagine a lot of claims assessors can get quite emotionally invested too.  So I think for all of us it’s probably just that awareness, you know, something across the industry – some kind of extra awareness.  

I know we talk about – there’s a big thing at the moment for vulnerable client policies and awareness strategies which – I’ve been involved in a few different ones but I think it’s, you know, part of that – whenever I’m doing those things that I always say we talk about vulnerable clients but we must talk as well about the people who are being engaged – obviously I come a lot from the adviser point of view to say, “Well if an adviser,” you know, we were saying pre-sales underwriting in some ways, depending on the stuff an adviser could be hearing from somebody, that may not all necessarily get translated to the insurer because obviously not always everything goes to the insurer but that doesn’t mean that that person hasn’t heard that and then possibly needs support because they’ve heard something that could be quite triggering for themselves or, you know, that it’s just been something that’s quite intense and sometimes people can get very emotional when they’re having to chat through past experiences.

Matt: Yeah, yeah.  No, I agree, I agree.  It’s certainly, with my IFA hat on, I’ve done hundreds of tele-interviews so that’s when [inaudible 0:36:38] over the telephone and you’re absolutely right and I suppose I’m a little bit hardened because of what I’ve been doing for the last 40-odd years but some of the, you know, you can hear the client’s voice break sometimes when they tell you about something –

Kathryn: Yeah.

Matt: And, you know, if I were to put myself in your position [inaudible 0:36:58] team’s position maybe aren’t quite as hard-nosed as I am these days.

Kathryn: Yes.

Matt: It must be horrible and – there you go.

Kathryn: It is.  I think some of my team are a bit harder than me and they’re able to cope with it.  I’m just – I’m the one that ends up getting off the call and then going through a little bit of a spiral of like, “Oh no, what that person’s faced!” and then Alan will give me a hug, I’ll get a cup of tea and then I’ll carry on again.  We all react in different ways, you know, that’s it, for me it’s fine, I’ve got Alan there with me – obviously for anyone who’s listening and doesn’t know, Alan’s my husband and we work together, you know, and we can just – as I say, he gives me a hug and I have a cup of tea but not everyone’s got that and at the moment as well there’s, you know, a lot of us have been working from home for so long.  Some of us from, you know, eight months or so on our own.  It’s quite isolating and if you are hearing difficult stories, you need to make sure, you know, as I say, as a company owner, you know, it’s our duty to make sure that the team’s okay and that things aren’t getting too much when they’re listening to some of these things.  

But I suppose it would be really good as well to talk about, you know, we’ve talked about how things were when it started for you and sort of like what was available and – in regards to obviously the underwriting, the claims, the – when we talk about the reinsurers and now obviously you are a consultant.  I suppose it would be really good to hear about what you are doing now and also how the market looks to you now and sort of like probably the things that you’ve seen that have developed which are incredible – obviously we were going to talk about big things that have happened but from what you’ve said, critical illness, income protection are massive things that have happened and, you know, there are definitely, you know, from my knowledge as well, there are some health conditions where now cover is available where it definitely used to be, even 10 years or so ago, it used to be very difficult to get or impossible to.  So it would be really good to hear your take on the market now and maybe what you’d like to see coming forward as we go forward into 2021.

Matt: Okay, well two parts to this.  The first part is what I’m doing now and I work with – actively work with, as of today’s date, a couple of IFAs primarily working on the high net worth cases but certainly with one of them helping out where I can on cases that have got – have ground to a halt in quite an underwriting-related matter so I help to unravel some of the knots that go on and get cover for a particular client.  You know yourself that some of the decisions that are made in the market are, in my opinion, rather odd and they can differ between insurers and, you know, you’ll know this yourself that it never ceases to amaze me when you get a decline from insurer and a standard rate from another.

Kathryn: Yeah.

Matt: It’s quite remarkable really and in the days now of very automated underwriting manuals, so an underwriter will base their decision on a – from a manual, a guide in other words to – for whatever the loading would be, or the exclusion or whatever, it never ceases to amaze me but it – not necessarily decline to standard normal terms, that’s relatively rare but big loadings, you know, three times the normal rate down to one and a half times the normal rate are not uncommon at all.  Not uncommon and that’s why different sets of rules apply but it’s rare but the – that type of spectrum comes from an underwriting manual.  An awful lot of human intervention comes into that in one way or another.  Though to be fair, all the insurers have doctors working for them and sometimes doctors have their own personal views on types of risk –

Kathryn: Yeah.

Matt: And that can sometimes account for some of the – the wide range of decisions that are seen.  So it’s not always the underwriter.  Sometimes the doctors that advise them on the cases that are, you know, you don’t see every day sometimes.

Kathryn: Yes.

Matt: So what I do, I have worked directly with a couple of the very high net worth brokers in the marketplace over the last few years and work in IFA-land as well and – but one of the interesting areas I work in is expert witness work.

Kathryn: Okay.

Matt: And it’s nearly always on claims – disputed claims.

Kathryn: Yeah.

Matt: And it’s quite remarkable how often – with some inside knowledge and by that I mean 40-odd years of how the market works and you can get claims paid even though if they’ve done something [inaudible 0:42:07] – they might have failed at the ombudsman.

Kathryn: Yeah.

Matt: One of the people that works for the ombudsman and they’ve gone somewhere to try and get – push through the claim and, you know, certainly I’ve been lucky enough to be involved in a few that you have to run completely.

Kathryn: Oh amazing.

Matt: One of the areas that – where it seems to break down with insurance companies is that if there is a claim and there’s been a misrepresentation of what the client has said –

Kathryn: Yeah.

Matt: Then generally insurers, whilst claiming – so the claims team will ask the insurers what they would have done if they had known the information that came out at claim and it seems – again I believe that’s common practice.  It certainly was the practice at Aegon when I was there but that was a while ago now.  Unfortunately what seems to happen is that if a claims person asks an underwriter, an underwriter knows that that person – if what they are looking at turned out to be a claim then they’ll go over the top.  They’ll be harsh and they – I think it’s almost natural to do that.

Kathryn: Yeah, I was going to say, I think that would be.  I think you’d have to specifically stop, you know, and say, “I think, right, let’s not look at the end result of what’s happened here and let’s go to – this is a brand new person.”

Matt: Absolutely and it’s – it doesn’t happen in every case there’s no two ways about that but it can happen and it’s something that sticks out in the expert witness work I’ve done – an underwriter will come back and you think, “Well hold on, really?  Even if you’d really done that?  If this had been a new business case, what [inaudible 0:43:57], you know, that or whatever.”

Kathryn: Yeah.

Matt: And then, as I say, it’s a very interesting area and – the expert witness work and very rewarding.  I mean, you can get somebody the claim paid, you know, and, you know, I always say, [inaudible 0:44:17] happy getting involved in high net worth cases, so millions and millions of pounds worth, I never ever forget that £100,000 is an awful lot to somebody.

Kathryn: Yeah, oh absolutely.

Matt: £50,000 is an awful lot to somebody, £2,000 could be, you know, and it’s always worthwhile fighting for.  It’s also worth underwriters as well, you know, I have heard the comment in my time saying, “Oh, well it’s only £10,000, not going to bother with this one,” or £50,000.  If it was £50 million then I can absolutely assure you that they’d do everything they possibly could to get the case through.

Kathryn: Yeah.

Matt: So, you know, I’m not – it’s a rare occurrence I have to say that underwriters think like that but I have seen it in my time and I think underwriting managers or the powers that be just need to look at that as well.

Kathryn: Like you say, I’m sure there will be, you know, I think – as with anything isn’t it, I think with all of us, you know, there’s going to be some underwriters who maybe think like that but then there’s going to be some advisers who maybe are all for just getting like the highest amount of commission rather than, you know, sort of doing the – sort of like what’s necessarily best, you know, in some ways.  Like you say, it’s always like the management control isn’t it, just to make sure that everybody’s working as best as they can be and for the absolute benefit for the client.

Matt: Absolutely.

Kathryn: We are sort of like coming towards the end of the podcast.  Is there anything else that you’d like to sort of like chat to people about and mention?

Matt: I don’t think anything that’s mind-blowing particularly but I’ll just give you a little bit of a story that I always remember.  I think you and I, Kathryn, have talked about medical evidence.

Kathryn: Yes, ah, medical evidence.  You can hear me already, aah.

Matt: I’ll just kind of leave you the – when I was in my reinsurance days a large case, I can’t remember the sums at all but it would have been in the millions, having put, you know, [inaudible 0:46:25] market so it ended up with six GPRs being obtained, one each by each of the insurers that wanted to win this case.

Kathryn: Right.

Matt: We looked at the first one and looked at the last one and you wouldn’t have thought it was the same person.

Kathryn: Right.

Matt: Because a GP we think possibly just got completely bored by the time of the sixth one so he hardly put anything on it.

Kathryn: I was going to say, I was just imagining something magically fantastic in the last one just like we usually see which is, you know, something along the lines of, “Oh this person has epilepsy,” and then you go back to the client and they go, “I’ve never had epilepsy.”  Then you have to get the client records corrected and there’s a whole bunch of other stuff going on there but I imagine the insurer that got the sixth GPR was – I don’t know if they’d be happy or unhappy that they’ve not got all the information, I’m not sure.

Matt: [inaudible 0:47:19] It’s an interesting one when of course the reinsurer has to say, “Well actually, I’ve got some other data on this person and it’s completely different,” you know.  But yes, I mean many medical records are very strange I have to say but, you know, if we go back to understand – I can understand why some medical records are incorrect because, you know, most of them were all large brown envelopes – I don’t know if you were – have you ever seen those?

Kathryn: No I haven’t.

Matt: Oh goodness gracious.  I am showing my age now.  They basically, you had all the records handwritten generally by the GP, you know, in a big brown envelope and the surgery nurse would bring them out every time you went in and anyway, cut a long story short, all of those at some stage, it’s a few years ago now it has to be said, had to be – all of that paper handwritten material had to be put manually onto the computer.

Kathryn: Wow.

Matt: Now –

Kathryn: They’d have a barrel of laughs with my GP records because mine are about 300 pages.

Matt: Well there you go, you know, to an extent – for a start people who are transcribing it are human, they can make the odd error okay, and two, you know, 40-odd years I’m used to it now but a lot of people could not read doctors’ handwriting.

Kathryn: Oh it is atrocious isn’t it?

Matt: So if you’ve got – you’re trying transcribe something and you can’t read it onto a, you know, onto a new record – patient record, it’s not the easiest thing to do in the world in the first place.  So that, you know, it’s one of the reasons why data is not fantastic on some areas and if you have a private GP and you have an NHS GP, you know, you have consultants who should, best practice, to update your GP on whatever the consultant has seen the individual for but not always and you, you know, it is – I’d simply say, the bane of an underwriter’s life – depending on the evidence –

Kathryn: I was going to say, I did actually get a thank you note when I sent mine in.  As I say, 300 pages and I got an email back saying – you could read the sarcasm in the email.  It was good in a good laugh kind of a way but it was a case of, “Yeah, thanks.”  I was like, “Well I’m not taking any risks.”

Matt: Oh absolutely.  Absolutely, it’s – I think the role of the underwriter and claims person for that matter is never quite as simple as it sounds let me put it that way.  Just with the basic evidence which is the key if you’re going to make a decision on somebody’s premium and when it’s just not there or there are gaps in it or it’s as though that person hasn’t even followed it up –

Kathryn: Yeah.

Matt: On something which is important, you know, they probably have been but it’s just not in their records and that again might be why some of the underwriting decisions look distinctly odd as you mentioned before [inaudible 0:50:38].  So the medical evidence side is always fraught with challenges it has to be said and probably I would leave you with that apart from saying thank you very much for having me on and I genuinely believe, anyone who wants to be an underwriter out there listening, it’s a fantastic career and very, very rewarding and if you think of all the improvements in medical evidence, sorry, not medical evidence, what am I talking about?   

Kathryn: Yeah.

Matt: Medical advances and you mentioned cancer earlier on –

Kathryn: Yes.

Matt: And you have to keep on top of that as well as political risk, overseas travel, the latest statistics for people falling off Mount Everest for whoever wants to, you know, taking out cover just before they go, racing car drivers, you know, it’s not just life or disability, you’ve got all other types of risks involved that an underwriter can look at.  I’ve thoroughly enjoyed my 41 years to-date and I’m moving into my 42nd year now and I would completely recommend it to anybody.  But, underwriters only have a job because there are IFAs at the point of distribution out there selling policies and getting out there like you and Alan do so, you know, thank you for your job as well – for what you do in your job too.

Kathryn: No, I was going to say, thank you, I was going to say, I’m one of those people though, I’d love to do everything.  So it’s like absolutely fascinating in a sense like, “Well I want to be an underwriter as well,” and then I’m like, “I want to be an actuary,” and I’ll just keep going around saying, “I want to do this, I want to do that.”  But I know that our training that we do at Cura isn’t massively dissimilar to that of like, you know, trainee underwriters.

Matt: Sure, sure.

Kathryn: So it’s quite interesting but I don’t know if it’s the same for underwriters that it is for like some of the members of my team and that but because we know obviously so many things that can – signs and symptoms of things that can lead to other things, we do end up kind of doing like a bit of – you kind of – we’re all kind of diagnosing ourselves with things in the office like, “I’ve started thinking this, can you remember that client the other week where they had this symptom and then it ended up being this?”  And we go, “Right, you’re going to have to get yourself checked,” you know, and we sort of diagnose each other.

Matt: I can completely actually understand that.  I know two trainee underwriters who actually got so stressed with that exact situation that they actually left underwriting.

Kathryn: Oh wow.

Matt: And these guys were graduates, one of them had a law degree and I can’t remember the other one, you know, but yes they got too involved and started self-diagnosing and they had to – they went – they left.  End of story really.  But yeah, you know, it can be a challenge.

Kathryn: Absolutely.

Matt: No two ways about it.  So yeah.

Kathryn: Fantastic, thank you – thank you so, so much for coming on Matt and I hope that I can maybe get you back on future episodes and we can chat sort of like more in depth about possibly some different risks – like you say, it’s not just life, it’s not just health, there’s lots of other things too.

Matt: Absolutely.

Kathryn: So obviously this is going to be, as I say, the last episode for 2020 and the last episode of season two.  I hope that everyone listening will come back for season three – we’ve got some exciting things coming up, a little slight change to the format of the way we’re doing things so I hope that you stick with us and enjoy that.  But if you have been listening and it is part of your work, that you are working possibly in the insurance or underwriting side of things – or actuary, we’ve gone around all the houses today, then please do feel free to go onto the website which is www.practical-protection.co.uk where you can claim a CPD certificate.  So again, thank you so much Matt and I hope you have a lovely Christmas and New Year.

Matt: Thank you very much for having me again and yeah, to you and Alan and all the guys listening, Merry Christmas and look forward to speaking to you again next year.

Kathryn: Thank you, bye.

Matt: Bye.