Axa's Graham Harvey: What’s in a name?

What happens when words crash head on with the insurance industry? Total Permanent Disability (TPD).

Someone who has become disabled following an illness may well believe that it is total and permanent because it's changed their life.

But justifying what the industry means by ‘Total' and ‘Permanent' against people's subjective understanding of those words is an ongoing debate. Many claims are rejected because the definition is misunderstood, which means people are buying products they don't fully understand.

Recently an ABI working party announced plans to educate advisers more and standardise the definition.

Is this enough? Of course standardisation and education will help but I believe many claims will still be declined because people will often regard themselves as having a total and permanent disability - an issue that must be handled with sensitivity.

Many people will also have 'any occupation cover' which means they can only claim if they can't do any job and not just their own job.

Many advisers view TPD as a useful 'catch-all' but is this really a responsible way to advise people? I feel the industry needs greater certainty.

HEALTH Vs OCCUPATION

My own view, which runs contrary to the recent ABI agreement, is that we should move to a position based on health rather than occupation. Under critical illness cover if someone has a heart attack we'll pay, assuming it meets certain severity criteria. What we don't do is ask if they can work.

I accept, even with critical illness claims, there is a degree of ‘grey' based upon severity criteria but at least we're not trying to guess the future based on whether the condition is permanent or not.

I believe there's merit in considering the abolition of TPD, replacing it with an extension of the critical illness definitions to cover areas such as mental illness and chronic pain.

It's up to providers to be clear about what conditions are covered. This should result in greater clarity and certainty for advisers and their clients, leading to more meaningful cover.

Reducing the level of declined claims is such a big issue for the industry.

The less we appear in the consumer press for declining claims the better. Each time this happens another raft of consumers are dissuaded from getting the cover we all know they vitally need.

Non-disclosure is our biggest problem but claiming for conditions not covered does damage the perception of the industry. I believe that moving away from TPD to extra CI conditions will be a move in the right direction towards building more trust.

Graham Harvey is managing director of Axa protection