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..
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.
“In the literature, there is still a pervasive lack of recognition between skeletal muscle injury and ALT elevation, which has led to the unsubstantiated conclusion that serum aminotransferase elevations are due to liver injury...”
Rahul A. Nathwani et al.
Division of Gastroenterology and Liver Diseases
University of Southern California School of Medicine Hepatology
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.
As mortality and morbidity underwriting undergoes a much-anticipated metamorphosis to accommodate the demands of the 21st century, the need for fast, reliable and cost-effective screening resources has come into clear focus. The purpose of this paper is to examine the extent to which Rx profiling is one of these resources.
Knowing which pharmaceuticals an insurable applicant is taking has always been a key goal of medical history-taking. It is axiomatic that if we know what Rx an individual is taking, we have keen insight into his medical history. It is an a priori assumption, therefore, that Rx profiling services will serve to enrich our ability to relate pharmaceuticals to medical histories.
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.