The insurer winning business by battling discrimination

In 2014, a new managing general agent (MGA) was launched in the UK—and this one had a specific purpose. Emerald Life was created to help members of the lesbian, gay, bisexual and transgender (LGBT) community buy something that most people take for granted: insurance.

According to Steven Wardlaw, chairman of Emerald Life, the genesis of the company goes back to an awareness of a culture of discrimination in the market. He stresses that it can take many forms—it is not necessarily about the product, but the customer journey and the nature of customer service.

Wardlaw says the idea formed after hearing numerous stories from people recounting their embarrassing/awkward moments when trying to buy or claim under insurance.

“In one case a gay male couple adopted two young girls in Moscow. When they got back to London they sought a family health policy but were told that they weren’t entitled to a special discount because they didn’t qualify for the definition of a family under the health policy they were looking at,” he recalls.

“And there was a lesbian couple who, as they were married, had the same surname. But their relationship was changed to ‘sisters’ in the system. What resonated with our LGBT customers was the idea you don’t have to ‘come out’ every time you fill in an insurance form, or ring an insurer or a call centre.”

Never assume

Call centres were cited as one of the biggest bugbears for customers.

“Call centres work on a series of assumptions, but you don’t realise one has been made until you fall outside one of these assumptions,” Wardlaw explains.

“If I want to insure myself and my partner, the response that tends to come from most call centre personnel is ‘great, what’s her name?’.”

That’s one of the things that tends to annoy people, because you’re immediately into discussing your sexual orientation with a total stranger, he adds.

Emerald started looking at the issues involved and how things might change. In 2014 the company decided it was going to do three things: first, to make sure that its customer experience suited everybody, not just white cis-gendered, heterosexual family men; second, to have some imagery that reflected diversity, because people weren’t feeling included in the voice of insurance companies at all; and third, to check policies. It discovered that some wordings were discriminatory.

In terms of the policy wordings for the products Emerald did two things.

“First we filled in the gaps, where there were policies designed for one particular family group that didn’t suit another. For example, we changed the definitions of bride and groom in a wedding policy to a more inclusive version, and added fostered, adopted or surrogate children in family definitions for travel policies, as well as also including discrimination cover, which many people might not need but some might,” Wardlaw explains.

Emerald then dealt with more active discriminations, for example in some term life policies which ask various health questions and then ask about professions.

“Obviously they’re a bit more concerned if you’re a soldier or a miner than if you’re an accountant in terms of life cover, and we found a policy where for a slightly convoluted process you could get life cover,” says Wardlaw.

“One of the things that they don’t like are people who spend their time in the air flying. You could get life cover if you are a male pilot, but you couldn’t get life cover if you’re male cabin crew. There is one big difference between male pilots and cabin crew, and I don’t mean to stereotype here, cabin crew are usually gay men and that’s the way of the world. And a lot of this stuff was still hidden.”

Reinforcing stereotypes

Although the Association of British Insurers (ABI) declared in the early 2000s that customers could no longer be quizzed about their sexual orientation as a part of the insurance application process, Wardlaw claims that instead insurers found a way of coding stereotypical ‘gay’ things and then tried not to cover people who did them.

For example, there was a question in one of the home policies that Emerald looked at about working in the fashion or entertainment industries; those who said they worked in either of them could be declined insurance, as some insurers tended to presume that gay men worked in those areas.

Wardlaw claims there were a lot of these kinds of presumptions, where wordings and definitions had not been changed for 20 or 30 years, ie, since the time when people were concerned about covering a group that might contract HIV/AIDS.

Now it is 2019, so why is the industry not dealing with this discrimination? Wardlaw says there are two answers.

“A great advantage for Emerald is that because it is a young insurer it has some very flexible IT systems. By contrast, a big insurer might be an amalgamation of previous insurers with legacy systems that date back even longer than 30 years, so it can be very difficult to make changes.

“For example, the drop-down menu for a client’s title might not include anything like ‘Mx’, which is the gender-neutral version. Emerald was the first to use it because we have a lot of transgender customers. We had a discussion with one insurer who said that adding that title to the list of options just couldn’t be done on their platform,” he says.

“For a big insurer it can be a sizeable net cost to change something like that, especially taking into account all the various reports and committees that it would have to be passed through via internal protocols. A company would ask what’s the business case for it, as everything involves cost.”

The second issue that Wardlaw has with insurance companies as a structure is that they tend to have two groups of people: underwriters, who price risk, and scheme organisers and scheme sellers—the people who are looking for potential markets to sell into.

“What they don’t have is anyone who looks at policy wordings to work out whether they are fit for purpose and suit the market they are in. That’s a bit more serious because that is breaching the FCA rules on treating the customers fairly, where you can’t show due consideration for the customer,” he says.

“If I’m really honest I’ll say that the glass is half empty—a good example is HIV. Over the last 10 to 15 years treatment and management for people with HIV/AIDS has come on in leaps and bounds, a massive improvement, as there has been with diabetes.

“You’ve got two groups of people for whom the prognosis has gone from quite severe to where it’s a manageable, treatable, condition. Over that time the insurance industry has completely moved everything to make sure they are at the forefront of the latest medical research on diabetes.

“They’ve not done the same for HIV. I’m not angry, I’m disappointed,” Wardlaw concludes.