When teleunderwriting began to disseminate in the late 1990s, life insurance underwriting began a literal metamorphosis. The net effect has transformed risk assessment more in the last decade than it changed over the second half of the last century. For compelling reasons, this process will accelerate in 2010 and beyond.
This essay is one underwriter’s observations regarding aspects of the Association of Home Ofﬁce Underwriters (AHOU) which may be deemed worthy of rethinking and, if so, perhaps modifying on some basis, now or in the future. A wide range of topics is discussed, with the sole purpose being to offer up thoughts for consideration by AHOU members. The author hopes what is said here will be received in the spirit intended.
Just a year ago, one would have had comparatively little incentive to write this commentary…which is perhaps the best way of saying that our underwriting environment is now changing dramatically due to the confluence of a number of factors.
“Faster, cheaper, better” has been the mantra of life insurer senior management for years now where risk appraisal in concerned. This has propelled teleunderwriting into the forefront as our paradigm of choice and also fueled the embrace of rapid-acquisition assets like Rx profiles and MVRs in America.
Unlike “Terminator” movies, the machines in question here are the so-called “underwriting engines.” These “straight-through processors” have been around for years. Yet despite smashing success in the United Kingdom and other markets, they have languished in North America.
This appears to be on the cusp of changing now, due to the confluence of (at least) five key factors..
To determine insurability of applicants age 65 and over on the same basis as we do at younger ages all but guarantees a botched job.
This is because factors that we know contribute to premature death in young and middle-aged adults differ dramatically from those linked to excess geriatric mortality. These examples give clear evidence of this too-often-overlooked reality.
Cardiovascular events are the #1 cause of mortality (and morbidity).
Our traditional screening approach to cardiovascular disease has elements that confer value. But there are also prevalent screening modalities that have considerable expense and delay baggage, and may also be overvalued when compared to more progressive alternatives.
While we underwriters do not get directly involved in the sales process for the most part, there are likely some advantages to accrue to us if we suggest some “angles,” if you will, that help our producers make the value of CI policy ownership clear to prospective customers.
This is one approach that I think has merit, especially in the USA.
There was a posting recently at lifeunderwriting.com wherein the underwriter bemoaned the fact that his company would not fund his enrollment, and that of his peers in the department, in the State of the Art™ Continuing Education Program.
This is a classic case of missing the forest for the trees, as they say. And not just because it happens to focus on the education program into which I and my colleagues at SelectX-UK have invested so much of our energy and devotion.