Nurse-led assessments consistently deliver higher annuity rates, MorganAsh study finds
25 June 2024
Annuity quotations obtained using nurse-led medical assessments return a significantly higher annuity rate than those submitted using standard online forms, a new study by MorganAsh reveals.
The survey found that in 76 per cent of cases, the MorganAsh method returned a higher annuity rate. While the mean uplift was 2.5 per cent – or £229 per annum – many cases saw uplifts of 10 per cent or above. In fact, one case in particular saw an increase of 33 per cent – delivering almost £7,000 in extra income every year.
For those cases which returned a lower rate, the amount was minimal. Just seven per cent of cases recorded a lower rate that was greater than one per cent difference. Nonetheless, more than half of cases (59%) saw an uplift that was greater than one per cent, using the MorganAsh method.
The study was originally conducted in June 2023 and repeated between February and May 2024. Two quotations were obtained from four different providers; Aviva, Just, L&G and Canada Life, with rates recorded for each case and both methods. The greatest difference in average annuity rates was seen with Aviva – at 3.7 per cent.
The study also found the MorganAsh method to be cost-beneficial, even when considering a small increase in assessment, underwriting and administration costs. MorganAsh determined that, based on average life expectancy and the length of annuities, a rate increase greater than £10 per annum is cost-beneficial. The study found that three quarters of cases (75%) achieved this uplift of more than £10.
Andrew Gething, managing director of MorganAsh, said: “In our experience, nurse-led medical assessments deliver better annuity rates – often significantly so – and our study certainly backs this up. This is the case because a MorganAsh nurse gives consumers greater confidence to disclose information they may not otherwise volunteer. Our nurses are also fully aware of the information medical underwriters need – and how this needs to be recorded and presented.
“Previously many have opted for quick and cheap quote methods completing online forms, especially when annuities were poorer value and with little chance of take up. With Consumer Duty in mind, the attention returns to obtaining the best quotation for customers, so a fair comparison can be made against other options. These results show the best option is to use a nurse-based assessment.
“Given the path of interest rates, demand for annuities has continued to soar to the highest level in a decade. As advisers help clients lock in rates ahead of any expected base rate cut, having proven methods to achieve higher annuity rates will be incredibly valuable.”
MorganAsh is well known for MARS – the MorganAsh Resilience System – an award-winning consumer vulnerability platform which is supporting firms across financial services and the utilities sector to identify and manage vulnerable customers and monitor their outcomes. Tools such as its objective Resilience Rating – which is much like a credit score for consumer vulnerability – is helping firms answer the requirements of Consumer Duty.
In fact, MorganAsh recently added a new triage service to MARS to help financial advisers identify when to obtain an annuity quotation for a client. This uses health data already collected for the vulnerability assessment to make a recommendation on the likelihood of an enhancement.
In addition to MARS, MorganAsh has been providing medical underwriting services for more than a decade – and is trusted by leading insurers. MorganAsh’s underwriting team can be used to supplement a firm’s in-house team or to provide a fully outsourced, use-as-you-need-it service.
To find out about MorganAsh, please visit www.morganash.com. To access a free trial of MARS or for more information, visit: morganash.com/mars or phone: 0330 159 8162.
