KNIGHT HEALTHCARE NEWSLETTER NUMBER 2

SUMMER 2011

I FA Sup p ort
Private Medical Insurance sales for your business

Knight Healthcare supporting IFAs

Summer Update from
area to focus on. One issue is that in addition to the knowledge of the sector that is required in providing a full range of client support, it is particularly labour intensive to support the individual market. With this in mind the Knight Healthcare approach is to provide a full initial advisory service including : quote, client report and then application sign up process. In short if you can pass the leads to us we can really add an extra layer of professional advice for your clients. Plus with the average initial commission rate running between 30% and 40% for individual cases, PMI for private clients can be an extremely lucrative element of your practice.

THIS QUARTER :
2.1 SUMMER UPDATE Find out how Knight Healthcare adds value to a variety of IFA practices around the country. 2.2 EXTRA INCOME FOR IFAS Here we look at the ways that Knight Healthcare can boost your income streams from private medical insurance 2.3 FOCUS ON INDIVIDUAL A rewarding area of nancial advice - private clients are often overlooked for PMI purposes heres our guide as to why you need to get us in front of them ! 2.4 INDIVIDUAL CASE STUDY Combining elements of personal and switching our client to a new insurer

Knight Healthcare. Since launching in early 2011 we have already begun working with a range of IFAs and professional introducers. This includes accountancy rms, business consultants and of course a wide range of IFA practices from small local intermediaries up to large on-line national IFAs. Where we can help is to place the focus on supporting the IFA on their sales of both individual and group private medical cover. We look to create a long term relationship with both IFA and client and make the advice on cover less commoditized and more in line with the advice process for products like pensions and investments. In this issue of our newsletter we are focusing on individual/ private client business. Looking at driving extra income from this valuable product area, enhancing the advice you are able to offer as a practice working in tandem with us and ensuring that you dont miss out on business that is literally there for the taking.

Focus on individual
Private Medical Insurance (PMI). There are three main areas to consider : currently uninsured clients; those with legacy personal policies that have not been supported or reviewed recently and lastly those scheme members leaving a company group and moving to a personal plan. Lets look at each in turn. For potential new personal clients PMI is all about the story we paint in their minds. I think its about selling them peace of mind that were something to go wrong with their health then private medical cover is an easy way to get seen, diagnosed and on the road to recovery quickly. Reforms that are likely in the coming three or four years are almost certain to reinforce the view that the NHS cannot be all things to all men and that PMI is a prudent purchase for the nancially au fait client. For the new client we provide an initial review of whats available in the market (basing pricing and benet decisions around

Extra income for IFAs In many cases clients within

your individual book of business will have private medical cover in place already and it is a really simple process for us to help you identify, contact and sign these clients to our agency to ensure as a minimum that renewal commission not previously earned is now coming into the business. Obviously our main focus is to improve the quality and range of advice for your clients on private medical insurance. However, it is also an issue for us to improve revenue ow for you and individual PMI is certainly a lucrative

KNIGHT HEALTHCARE NEWSLETTER NUMBER 2

SUMMER 2011

COST EFFECTIVE
MEDICAL INSURANCE FOR LESS If full private medical insurance isnt right for your private clients and their families then we can consider putting a hospital cash plan in place. Cash plans offer discrete nancial payments for routine dental and optical treatment along with a host of other valuable benets. This benet can be a starting point on the medical insurance ladder and with cover starting from a pound or two per person per week it is eminently affordable. In addition weve had some success putting in place voluntary or corporate cash plan schemes with a variety of organization types.

initial discussions with the client and the IFA). We typically quote between 10 and 12 providers to ensure we have the right options in place for the client. Once this information is in and collated we put together a simple three page client report (usually submitted via the introducer) which we follow up with either a visit to the client or (depending on geography usually) a more in-depth sales telephone call. Once business is converted we process, issue the usual terms of business, needs demands statement and so forth. Each new client also receives regular on-going contact and of course a review of cover prior to renewal to check all is well. In the case of currently insured clients there are several reasons why they may need their scheme reviewed, assessed and potentially rebroked. This might be because of increasing price, poor insurer/ previous broker service, benet refreshing is required, a claims issue or most likely a combination of several of the above. When re-pricing a plan we need to be cogniscent that if there are on-going claims it may not (depending on the severity) be possible to move to a new insurer without further underwriting. Our experience is that although lower prices in particular can be attractive to clients it is vital to keep the

dialogue with the client open to ensure they fully understand the underwriting implications of any action we recommend they take. In other words, pre-existing claims do not preclude individual switch but we are always careful to ensure that the maximum level of cover is maintained. A special category of switching clients are those moving from a group scheme into the personal sector. In this day and age there are probably more than ever of these types of client due to both redundancy and moves from people to set up their own small businesses. In effect we deal with this class of individual policy holder exactly as we would any other switching client but there are three additional factors to bear in mind. Firstly, they are used to the company paying for the cover for them, so they may be shocked with the prices they are initially quoted. Secondly we will almost never accept the continuation option quoted by the holding insurer - it is almost always unnecessarily expensive and lastly, we need to watch out for this kind of scheme leaver - it is very easy to miss them when someone leaves one of your group clients - you may never speak to one of the lower level of employees but their leaving and potentially moving to an individual PMI policy gives you a great opportunity to pick them up as a new

personal client and we will gladly assist you wherever we can to try and steer them towards other nancial services you provide as a practice. If we can be of any assistance with any aspect of your personal client base for individual private medical insurance please feel free to contact us on : 07792 075748, or e-mail info@knighthealthcare.co.uk

KNIGHT HEALTHCARE NEWSLETTER NUMBER 2

SUMMER 2011

An individual case study

We were contacted recently by an introducer who had a client who had recently left a group scheme with one of the big two insurers but wasnt prepared to pay the colossal premium increase the holding insurer were wanting to charge to continue cover with no additional underwriting. The case was relatively complex and as a result the intermediary involved did not feel condent making a recommendation. We visited the gentleman in question and it transpired that he had already allowed more than a month to pass since leaving the scheme and as a result there was only one insurer prepared to offer a backdated switch with no additional underwriting. This option was nearly as expensive as the continuation option he had already been offered. Fortunately this client was in excellent health and had no major on-going or recent health conditions. As a result it was possible to place this case with a much cheaper insurer on similar benets to his SME policy but put in place a new moratorium policy. Imposing additional underwriting in this way isnt correct for every client but in this case the situation i.e. claims/ medical history justied it and of course the ramications were explained in full to the client both verbally during the recommendation stage of the sales process

and also in writing from our ofce once the case went live. For the client we were able to put in place equivalent benets to their old policy but save them over 1,000 from the original continuation option. For our introducer who wasnt receiving any income from this client we were able to share 50% of the newly generated initial commission. Total income on the case then came in at around 300 each for us and the introducer. Of course the vitally important issue is that the client who had effectively cancelled their private medical cover on the basis that it was simply too expensive now has equivalent, affordable cover in place and of course the IFA introducer now has access to a private client he hadnt dealt with before when he worked within the previous company.

THANKS FOR TAKING THE TIME TO BROWSE OUR NEWSLETTER

Were always happy to discuss business with both our current and potential new IFA and introducer partners. For more information contact : Phil Knight at Knight Healthcare 8 Fairfax Grove,Yeadon, Leeds LS19 7WA 07792 075748 or
info@knighthealthcare.co.uk

www.knighthealthcare.co.uk