Underwriter Education: Reflections and Realities

There was an eye-opening report in the September issue of On the Risk.

Kristin Ringland, FALU (SCOR Global Life Re) presented data and analysis based on a recent AHOU survey on underwriting education and training.

I encourage everyone to read Kirsten’s excellent article (volume 31, number 3, pages 44-48).

After I read it, I realized it was time to clear the air about where we collectively stand in terms of one domain Kristen addressed: continuing education for experienced underwriters.

Having spent much of my time since 1977 as an underwriting educator, I hope I can add some timely insights by honing in on what the real issues are and why they need to be addressed.

Underwriters as Professionals

All of us hold that life and morbidity risk underwriting is a profession, akin to being a medical director or actuary.

The evidence for this is both robust and compelling.

Unfortunately, the fact that underwriting is a profession is at high risk of being understated – if not overlooked entirely – for a number of reasons.

Unlike the MD and FSA designations, FALU does not have anywhere near the recognition it needs.

Underwriters have incredibly varied educational backgrounds; again, in contrast to medical directors and actuaries. There is no undergraduate program in underwriting.

Underwriters need a broader bandwidth of expertise than other industry professionals. We are – more or less, give or take- part physician, part actuary, part accountant, part lawyer, part “private eye,” part psychologist (dealing with producers!) and so on.

Underwriting is both a science and an art.

Decades ago, Charlie Will wrote a book about the profound question: “does it make sense.” In my experience, the ability of underwriters to deploy this mindset is not driven by their education or experience.

Some underwriters have it; some do not…and the latter make crucial judgment errors because they cannot adequately identify and connect the dots, if you will, bearing on insurability, mainly in more complex cases.

We need to be far more proactive in promoting awareness of the professional nature and bottom line impact of what we do.

To date, we have largely failed to get this done.

Continuing Education for Professionals

There is a saying on the wall of my insurance alma mater that has become my mantra since I first saw it in 1970:

He who stops getting better ceases being good.

It is a given that medical directors and actuaries will have their continuing education needs readily accommodated by insurers.

Unfortunately – as Kristen’s report shows – we underwriters are all too often the “odd men out” in this regard.

Most insurers do not have adequate continuing education programs for their underwriters.

Many do little more than cobble together a hodge-podge of items gathered here and there, and then pass this off as legitimate CE.

And there are others doing less or even nothing in this regard.

How long would they keep their best actuaries and medical directors if they did the same to them?

Given the demand for experienced underwriters and how easily we can switch companies if we work remotely, you would think chief underwriters would address this shortfall on a priority basis.

Instead, what we too often experience is readily characterized by paraphrasing a famous sentence in George Orwell’s ANIMAL FARM:

All professionals are equal, but some professionals are more equal than other professionals!

Insurer that do invest in underwriters’ ongoing professional development send a far different message:

We recognize you as professionals and we value highly your essential contributions to the success of this enterprise.

Insurers lamenting attrition in “company loyalty” need to step up with meaningful action steps. One of them is investing in ongoing continuing education (rather than grumbling about it being “too expensive”).

Here is an eye-opening example of the “burden” imposed by providing high quality CE.

An insurer with 10 underwriters in our continuing education program spends $500 annually per underwriter, half as much for those with 20 underwriters, and so on.

This is a pittance when you consider the implications discussed above, not to mention that it is also a tiny fraction of what they shell out for actuaries’ and medical directors’ ongoing learning.

Fact is, if you limited your investment in the CE needs of your actuaries or medical directors to what you spend on underwriters, your MDs and FSAs wouldn’t be around very long!

Education verses Credentialing

One point made clear by Kristen’s report that we need to see the difference between real continuing education and earning industry credentials.

When we take exams in pursuit of the FALU (or any other designation), our goal is to add an impactful set of letters after our name. This defines our approach. We cram enough of the course content into our short-term memory in order to get a passing grade.

This is far different from our goal and thus our approach when engaging in continuing education.

Years ago, I wrote numerous ALU textbook chapters. I’d like to believe that underwriters compelled to read them to earn their FALU learned and retained at least a few nuggets to apply on the job.

At the end of the day, however, there is little overlap between credentialing program content and what should be found in real continuing education.

This is because credentialing program content is not:

• Based on anywhere near the amount of research needed for continuing education
• Focused on the most recent clinical knowledge and insights
• Zeroed in on the RED FLAGS that matter most
• Presented in a consistent format conducive to high comprehension and long retention

For these and other reasons, ALU textbooks have only two practical applications:

1. Earning the FALU
2. Initial training of new underwriters, in conjunction with other resources.

They are not a substitute for real continuing education.

The Futility of Cobbling

It is tempting for chief underwriters to cobble together a heterogeneous aggregation of variable quality learning resources and then pass this off as real continuing education.

The reason for doing this is transparent.

It’s cheaper!

What are the drawbacks to cobbling?

• Accessible content is entirely random; topics in need of the greatest emphasis are often unavailable…or what is available on these key subjects is already outdated due to interim developments.
• The content consists largely of broad overviews, much of which is already well known to experienced underwriters.
• The depth of research is minimal because of constraints on authors’ preparation time.
• There is some content that actually undermines the purpose of CE by reinforcing longstanding misperceptions and thus perpetuating underwriting judgment errors. We see this often in articles on lab tests and pharmacology.
• Some are meant to promote products of the authors rather than educate underwriters. Sometimes these articles overlook anything of educational value that might compromise their intended marketing impact. In this sense, they are not unlike “studies” funded by pharmaceutical companies that never fail to show “great value” for their latest concoctions!
• The formats and writing styles are widely inconsistent, limiting their clarity and impairing content retention.
• The RED FLAG approach highlighting the most significant information is seldom used, making it difficult for underwriters to pick up on what matters most.
• And, paradoxically, it actually takes longer to read and digest these cobbled-together items than it does to complete an installment of a real continuing education learning resource. This, in turn, erodes productivity

These drawbacks are ignored or tolerated for one reason only: not having to add a modest sum to the budget for real continuing education and then defend this budget allocation against pushback from those who want to indiscriminately cut spending.

Other “Free” Resources

Nothing is “free” in business.

Even when you don’t pay out-of-pocket, there will still be a price attached to every solution to every problem worth solving.

In terms of investing in CE, this ironically equates to a concept expressed succinctly in an automobile oil filter TV commercial:

Pay me now…or pay me later!

Many insurers use additional resources to complement what they have cobbled together.

These include:

• “Free” webinars by reinsurers and vendors
• “Free” live presentations by reinsurers and, rarely, vendors
• ‘Free” internal presentations and case clinics by medical directors and experienced underwriters.

All potentially contribute to veteran underwriters’ continued learning.

Nevertheless, there are realities in play here that need to be recognized.

Most free webinars are on subjects that contribute little to hands-on underwriter knowledge. This is because most free webinars are crafted to serve a primary corporate mission other than underwriter education.

From the 1970s through to the late 90s, reinsurers were well positioned to invest in educational and other resources for clients.

Today’s staffing limitations and other budgetary constraints rein in reinsurers’ best intentions. Hence, there is relatively little out there any longer that meets the criteria for continuing education targeted to the needs of veteran underwriters.

The proposition that veteran underwriters should expand the scope of their job to include facilitating education internally is appealing. Researching and presenting help them acquire skills that serve them well going forward.

Unfortunately, today’s preponderant emphasis on productivity undermines this approach.

Underwriters are expected to work more and more hours as it is, without piling all the time-consuming steps inherent in preparing and presenting high caliber continuing education.

Last year one company enrolled in our CE program told me they were going to “go this route.”

I tipped my hat to them and said I support the efforts they were making to enhance the skills of their underwriters.

What I did not say is that I’ve been told more or less than same thing by other companies that also stopped participating in our program for this reason…only to return a year or two later when the real costs they incurred were higher and the content generated less valuable than enrolling in our program.

Medical directors make an enormous contribution to what we do. I would argue that the magnitude of their impact is too often understated and deserves far greater recognition, industry-wide.

This is one of the reasons I organized the new Medical Director/Underwriter Discussion Group.

The “fly in the ointment” with medical director contributions to continued education comes down to them simply not having adequate time and support resources for this purpose.

Even when time is available, it is seldom sufficient for them to research, organize, prepare and present an adequate volume of continuing education on a sustained basis.

It takes me between 60 and 90 hours to create one CE course…and I have this down to a very precise protocol.

I should.

I’ve written over 200 CE courses in the last 14 years!

Each course is based on anywhere from 125 and 250+ studies, review papers and other resources I acquire, pour over, use in course content and then cite under “References.”

Medical directors don’t have time to do all of this on top of their productivity obligations and other accountabilities.

On balance, veteran underwriters and medical directors can and often do make meaningful contributions to continuing education.

But when one sees how prohibitively expensive this approach really is, it becomes clear that investing in an externally acquired continuing education program is far less costly.

Final Thought

In addition to the aforementioned implications for underwriter professional development, job satisfaction and company loyalty, there is one more consideration to bear in mind.

Your company’s prospects for substantial mortality gains hinge on the ability of your underwriters to identify and take best practice action on higher risk cases.

These are the cases most prone to becoming death or morbidity claims in the nearer-term future.

As some world wise fellow once glibly remarked:

Ya snooze, ya lose!

If you abstain from investing in continuing for experienced underwriters, your company is at very real risk for bottom line consequences hundreds of times greater than what you would have spent for high-quality CE.