Underwriting: Why your insurance was declined or given a loading

In this Deep Dive, Phil sits down with adviser Natalia (Nat) King to unpack one of the most confusing parts of insurance. Clients often ask why one insurer declines them, another applies a loading, and another offers standard rates. Nat explains exactly why this happens and why the differences matter.

Here are the key points from the episode:

✔ Each insurer works off a different rule book. Their underwriting manual, internal guidelines and the reinsurer behind them shape every decision. Two insurers can look at the same health history and come to completely different outcomes.

✔ Reinsurers play a big role. Whether an insurer shares 70 percent of the risk or only 30 percent, or whether they are fully reinsured, the reinsurer’s data and rules heavily influence the final decision. Changing reinsurer partners can shift outcomes overnight.

✔ Conditions like mental health, diabetes, sleep apnea and BMI vary a lot between insurers. One insurer might decline a condition completely, while another offers standard rates. Nat shares real pre-assessment examples where outcomes range from clean terms to full declines for the same client.

✔ Guaranteed renewable policies make insurers conservative at the start. Once your cover is active, they must continue to insure you. That is why the application stage matters so much.

✔ Pre-assessments are essential. At Skye, we gather detailed information and approach multiple insurers before a client applies. It saves time, avoids surprise exclusions and shows the best possible terms upfront.

✔ Good advice relies on good underwriting. Without it, clients risk ending up with policies that do not perform when they are needed most. Nat and Phil explain why pre-assessments are one of the most valuable steps in quality insurance advice.

💡 The takeaway: underwriting is not guesswork. It is a mix of guidelines, reinsurer rules, risk sharing and professional judgement. Getting it right at the start can be the difference between a smooth claim and a painful surprise.

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