Group credit life contracts offered by bancassurers often include limitations on amounts of coverage, age and health conditions that leave some room for the development of individual credit life products that can serve the segment of the population of borrowers corresponding to high net worth clients, senior citizens or medically sub-standard risks. Such individual products enhance the banks’ loan activity mainly because credit life protection insurance they often demand becomes available to a much greater portion of the population.
More recently, we have seen new regulations emerging in many markets – especially in Europe – aiming at limiting or even banning joint sales between loans and credit life insurance, in order to reduce the insurance cost and give money back to the end consumers. This new development, that is expected to expand even more in the future, creates a significant market for individual credit life business.
We have partnered with various distribution channels in many different countries around the world on all types of individual credit life products. This ranges from traditional brokerage or agent salesforces to direct-to-consumer distribution approaches via telemarketing campaigns and digital/internet platforms. Banks may also offer individual credit life coverage to serve the needs not covered by group credit life contracts or to suggest some competitive alternative to borrowers inclined to take their insurance outside of the group contract.
Typical individual credit life products protect repayments of balances on loans extended by banks to their clients against the latter’s death, permanent disability (either partial or total), critical illness, temporary total disability, hospitalisation and sometimes unemployment.
Our clients benefit from our ability to partner effectively with them to provide a comprehensive and responsive service at every stage in a product's design and throughout its lifetime. This includes everything from market analysis, product design, pricing and reserving, to medical underwriting and claims management. Our clients can also rely on us for expert support on sales and marketing, and on the design of efficient digital sales platforms or telemarketing campaigns.
Unlike group credit life schemes, individual products are usually based on a high degree of segmentation comprising age, occupation, sport/hobbies, smoking habits and loan amount. Their development and pricing requires therefore a high level of expertise that can be provided by Hannover Re.
We have the experience and expertise to provide effective support on all aspects of credit life, including potentially hazardous product types like those covering short-term disability and/or unemployment.
Individual credit life products often target niches and specific populations and require both adequate reinsurance solutions and expertise in product design, pricing and underwriting, that is rarely available locally. Thanks to its longstanding worldwide presence and expertise Hannover Re offers clients suitable solutions to turn a credit life product launch into a great success.
Hannover Re may as well provide solutions in order to cover high acquisition costs that the implementation of modern types of distribution channels such as digital platforms and tele-underwriting generate.
Our clients also benefit from the streamlined underwriting processes we offer that enable them to take full advantage of new distribution channels. This may include our automated underwriting solution hr | ReFlex that offers our clients a modern sales process and helps improving overall process efficiency as well as the risk profile of new business. hr | ReFlex is our life risk assessment system combining state of the art functionality with exceptional flexibility and ease of use. hr | ReFlex can be quickly and conveniently integrated into bancassurers’ own systems and fully configured to reflect local market conditions - resulting in better and faster risk selection and underwriting, and significant process efficiency gains. Subsequent cost savings will further increase sales.
In short, Hannover Re is well positioned to deliver the full range of support our clients need to achieve the optimum credit life solution for their individual needs.