Life Insurance Companies In The UK Are Turning To US Company To Combat The Rising Cost Of Obtaining General Practitioner Reports.

Business Editors/Health/Medical Writers

MARLBOROUGH, Conn.--(BUSINESS WIRE)--June 1, 2004

In an effort to get a handle on the skyrocketing cost of obtaining General Practitioner (GP) reports, UK life insurance companies are turning to US-based IBU, Inc. (Interviews by Underwriters).

Until now, the standard practice for life insurance companies in the UK to collect evidence of insurability about applicants was to order a GP report. However, costs have more than doubled in recent years to a current average of GBP 60. Coupled with stock market losses and pension obligations weighing heavily on life insurance companies, the industry is feeling pressure to find new ways to manage expenses in a more prudent manner.

A growing number of insurance companies are turning to IBU and its team of experienced underwriters to conduct phone interviews with applicants. Located two hours from New York City, IBU is successfully helping life insurance companies in the UK and throughout the US reduce costs by minimizing the need to order expensive medical records.

IBU employs a technique called tele-underwriting and uses only experienced professional underwriters to conduct phone interviews with applicants. The medical history information they gather is compiled into a thorough report, which Home Office underwriters use to determine insurability. Because of their real life experience as underwriters, IBU interviewers know exactly how to question insurance applicants to get true information, which allows them to more accurately determine if a health condition such as high blood pressure is under control or presents a serious concern.

Four UK life insurance companies are already working with IBU to replace GP reports: Royal Liver Assurance, Royal London, CIGNA HealthCare, and MGM Assurance. All four companies are using IBU as a complement to their Home Office Underwriting departments to reduce costs and improve time service.

"IBU was a new concept for us but we're always looking for ways to improve service, eliminate delays and reduce costs," said Pauline Coates, underwriting manager for Royal Liver. "We were very pleased with the results of a recently completed pilot study in which we identified 41 cases for IBU to conduct phone interviews. We were able to make a decision on just over 70 percent of the cases based on the IBU report."

In terms of direct savings, each IBU report cost Royal Liver approximately GBP 18, compared to GBP 60 for a GPR. In addition, 75 percent of the reports were returned within one day compared to 16-20 business days for a GPR. "Our underwriters were very impressed with the professional attitude of the IBU underwriters. They were very helpful and went far beyond our expectations in terms of the information that they were able to gather. I'm confident that IBU will enable us to make better quality decisions," said Coates.

CIGNA HealthCare began working with IBU in January 2004 on cases where the age of the applicant or a disclosed health issue required a medical history report yet a fast turnaround was needed to make an underwriting decision. "We're happy with the effect IBU is having on our business," said Angela Nisbet, senior medical underwriter. "We generally get the IBU report within a couple of days, whereas it takes a minimum of a month to get a GP report. In many cases previous to working with IBU, we had to decline because we were unable to get a doctors report. Now, we can get the IBU report and make a decision, which has allowed us to close more business."

Lincoln Tedeschi, IBU president, said, "In today's competitive environment, there are two factors that give US-based call centers a competitive advantage over UK-based centers. First, the time difference allows our underwriters to phone applicants in the evening after they have returned from work and are most likely to be at home. We are able to place calls during our normal workday from 12noon to 3:30PM Eastern Time US, which is 5:00PM to 8:30PM GMT. The second competitive advantage is that the cost of calling the UK from the US is surprisingly inexpensive. The competition among long distance providers in the US has driven down rates making it cheaper to call from the US than within the UK using British Telecom."

The IBU tele-underwriting model coupled with the company's online IBU/GPR Reduction Guidelines is a significant advancement in life underwriting. It allows Home Office underwriters to simultaneously improve the underwriting process, achieve better risk selection, and minimize the likelihood of ordering unnecessary GPR's.

For more information about IBU and to view a demo of the IBU/GPR Reduction Guideline visit www.ibuinc.com/UK.