The Financial Conduct Authority (FCA) has this week issued a ‘Call for Input’ (CFI) to the industry on access to travel insurance for those with pre-existing medical conditions.
It is well known, particularly amongst older travellers, that securing competitive travel insurance when you have a medical ailment can be difficult and expensive, that’s if you manage to secure insurance cover at all.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said: “People with pre-existing medical conditions feel poorly served by travel insurance. There are specialist services out there, but, often, people don’t know where to find them. We’ll work with industry to point people in the right direction and help dispel some of the myths and misunderstandings to ensure this market works better. This will also form part of our continuing our work on insurance pricing practices which are designed to lead to long-term positive changes across the market.”
It is a worthwhile exercise but actually goes against the grain of what insurance is. The regulator expects financial companies to be clear, fair and not mis-leading yet also expects competitive premiums for all. If a an individual has a serious or costly pre-existing medical condition that could costs hundreds of thousands of dollars if you become ill in the USA or the Caribbean, why should the healthy person pay for for their travel insurance to spread the cost and the risk across the fortunate many for the unfortunate few.
Insurance has always been about sharing the risk i.e. pooling funds to protect the unfortunate few, but equally if there is an increased risk of a claim, that person will expect to have their premiums loaded. It is like asking an ‘abstainer’ from alcohol pay the same motor insurance premium as somebody who has been previously disqualified for drink driving.
A prudent underwriter must set premiums to be fair to all and this should remain. There may be some need though for development of the market as we are aware, and the FCA has highlighted, that consumers find it difficult to access the specialist travel insurance market and need better information and services to redirect customers to specialist pre-existing medical insurance providers.