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.
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.
This survey was undertaken by sending questionnaires to 55 North American life and health insurers.
Of that group, 45 responded. Not bad.
It is ﬁrmly against my policy to name companies in the context of any survey or to make them identiﬁable in any way based on their responses. Sufﬁce to say that the majority of the TOP TWENTY life carriers are here.
“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
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.
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.
Hank has written a comprehensive research paper on a new test ideally suited for mortality and morbidity risk screening. It will serve well in tandem with NT-proBNP and other blood tests, as an alternative to treadmill ECGs and other slow, costly requirements we currently use.
Adding a dash of salt on the wound, a new study says consumers today are even less aware that banks offer life coverage than they were four years ago.
Dabbling in the realm of the audacious, one might dare to describe our collective response to the life insurance needs of the middle market as "90% lip and 10% service." Since banks are the delivery vehicle of choice to this vast, underserved market, why are bancassurance sales, relatively speaking, in free fall?
Enter everybody's favorite fall guy: underwriting.
In days of yore, the most doleful lamentation from those who coveted bank distribution was the galling disconnect between the instant-gratification expectations of buyers and the cold, hard fact that the rigors of underwriting could only accommodate applicants with the patience of saints.
Our capacity to configure customer-cozy risk assessment strategies is at hand. Informed deployment of 21st century underwriting assets all but guarantees actuarially sound, reinsurer-attractive and customer-friendly life products for bank-mediated dissemination.
Considering the predictable mix of business in a bank setting, rapid and cost-effective risk triage can be achieved with three primary resources: teleinterviews, prescription profiles and Medical Information Bureau records. The risk-history questions broached in this context must be carefully honed based on contemporary medical realities. By doing so, we can fashion far superior applications for this market.
By carrying off teleinterviews on a "warm transfer" basis mode and inter-digitating them other information, we can empower credible decision-making that is entirely harmonious with bank distribution tolerances.
Risk factors for short- to intermediate-interval excess mortality in middle-market applicants can be handily addressed with a combination of adroit interviewing and wizened analysis of pharmaceuticals prescribed within the past several years. The few cases needing further assessment would be quickly pinpointed in this process. And, thanks to teleinterview recordings, egregious attempts at material nondisclosure will be more manageable than ever, even after the fact.
Will there be coverage thresholds where more invasive requirements, such as blood and urine tests, will be needed? Sure, but thresholds at rather eye-popping altitudes can be countenanced when the yield from our core assets (teleinterviews and prescription profiles) is optimized.
Novel concepts such as "risk-taking behavior" and the "healthy-adherer effect" can be retrofitted to existing underwriting paradigms, balancing the loss of protective value that's implicit in walking away from traditional screening requirements.
It is incredibly safe to say that we have only scratched the surface where these alternative approaches are concerned. Unlike other options, they facilitate rapid turnaround time and should resonate with consumers because they bring the process that much closer to being driven by health-habit choices which we, ourselves, make every day.
The much-ballyhooed bottleneck between underwriting and life sales through banks is rightly dismissible as urban legend.
So much for the mythic mystery of how to serve the middle market.
Hank George, a Best's Review columnist, is the principal in his own consulting and training firm, Hank George Inc. He may be reached at HankGeorge@aol.com.