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..
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.
Teleunderwriting embraces multitudes. It is, at the same time, both a technical process that reconfigures day-to-day home office underwriting and a dynamic process that affects every aspect of how we select risks.
Let’s explore the technical aspect first. Teleunderwriting makes extensive use of the telephone as an information gathering resource. One day, the Internet should play an equivalent role…but, for now, the telephone is our focus.
For much of this underwriter’s 30 years of practice, he had to endure being denounced as head of “the sales prevention department” by angry producers who tired of waiting weeks (if not months) for a “thumbs up” on new business.
Those days will soon be gone…forever.
Who is THE ENEMY WITHIN?
“He” has no one name, no essential gender.
What “he” has is the incredibly untimely capacity to rapaciously rob your company of its future…and compelling evidence suggests this is indeed what is coming to pass across the global life and health industry.
In underwriting, we are seeing an increasing number of cases of chronic hepatitis C and nonalcoholic fatty liver disease (especially nonalcoholic steatohepatitis, NASH) wherein the proposed insured has not had a sufﬁcient clinical workup to determine if advanced liver pathology (signiﬁcant ﬁbrosis, cirrhosis) is present.
This is a key determination regarding insurability and the absence of this information has forced us to take uncertain actions…certainly insuring some who are bad risks while postponing others who are insurable.