Believe it or not, policies are getting issued faster than ever before. Now advisors can further speed the process. Marylou Dunn, vice president and chief underwriter for Munich Re, explains how
You’ve met the client, completed the application and sent it to head office. At this point, it seems like the heavy lifting has been done – so why does it feel like it takes so long to get a policy issued?
In fact, companies are getting policies underwritten and into the hands of the advisors with growing rapidity. Recent studies have shown that placement time has been reduced by four to six days since 2012. The two main factors driving this change? Technology and people.
Technology
Large investments in smart systems and electronic applications are paying off. Information gets to insurance companies in a format that is complete, easily transmissible and typically with enough information to enable to them to quickly process the application and get back to the advisor.
Expert underwriting systems that prescreen an applicant’s responses to questions allow underwriters to focus their attention on outliers – people applying for large amounts of coverage, those with significant medical history, those engaging in risky avocations or older ages.
Technology responds to changing demographics and customer profiles. Younger users are tech-savvy and demand an immediate and transactional approach. New, simplified products for life and critical illness appeal to this mindset. With shorter application forms and fewer underwriting requirements, the policy can be in the purchaser’s hands much more quickly. Embracing these electronic application systems will support continued improvement in turnaround times and reduce the number of amendments required on policy delivery.
For those who still prefer to use a paper application, ensuring that the forms are fully completed before submitting them to head office will ease handling. Incomplete or missing information can prevent the case from being set up and rather than being issued quickly, it’s referred to a pending queue to sit while the advisor has to track down the applicant for missing information. Each handling increases the wait time and threatens the success of the sale.
People
Increased use of tele-interviewing and conscious efforts by insurance companies to reduce the number of Attending Physicians’ Statements [APS] have been contributing to faster turnaround times, too. The advisor can play a key role in reducing waits by preparing a client for the tele-interview, paramed, blood draw or call from the inspection company. That way there are no surprises. The applicants understand the kinds of questions they will be asked and tests that will be done. Time isn’t wasted due to rescheduling or call backs for missing information such as medications, names of specialists, reasons for the consultation and tests completed.
Advisors’ preparation should include coaching applicants to give full disclosure during the tele interview. For underwriters, their job is to dig deep into the facts to get the truth. Full disclosure by the client will speed up the process and ensure there are no surprises at claim time. In many cases, the more comfortable clients are with answering the medical and non-medical questions and the more information they can provide to the interviewer, the less likely underwriter will have to resort to an APS to fill in the details.
That being said, APS reports are valuable tools in risk assessment – particularly for older people with significant medical history, including cancer, heart disease or diabetes.
This is where the placement time gets longer. The wait for a doctor to respond is out of the underwriter’s control, and some companies have reported it can take an average of 18 days to get an APS.
That’s why insurers need to know up front about every doctor a client has seen – not just their usual physician. Imagine waiting for the APS, only to discover that a second report must be obtained from another doctor who wasn’t previously mentioned.
This is a detail-driven industry, so sweat the small stuff. Don’t skip questions – get doctor names, medications, dates seen, etc. There can never be too much detail. The more information the underwriter has upfront, the fewer questionnaires, phone calls, doctors’ reports and amendments.
Certain markets, such as the mature age markets, call for special handling. Be prepared for more requirements when dealing with complicated medical history, multiple impairments and more than one doctor’s report.
Will we ever get to the day of 100% instant issue coverage? I doubt it. However, we can and are getting better at getting policies into the client’s hands quickly and efficiently, and this is good news for all. We have a mutual goal to put profitable business on the books. Underwriters are trying to balance risk assessment, cost and time to underwrite. A very important consumer need is satisfied, insurance companies are putting good business on the books, and advisors are compensated.
At the end of the day, we’re all in this together. Communication, respect and openly sharing knowledge are the keys to success.
The biggest do’s and don’t’s for advisors
Do include a cover letter
I can’t overstate the value of a cover letter. By the time you’ve had the client fill out an application, you’ve invested substantial time and energy meeting with him or her to develop a personalized financial plan. You understand the applicant’s needs and motivation for purchasing life critical illness or disability insurance. Telling the underwriter this type of background – the purpose of the coverage and how the face amount was determined – will go a long way to ease your case through the underwriting process.
If the insurance coverage is necessary to secure a loan, provide the loan details. If it’s business-related, will it cover share redemption, buy/sell, key person? What other business members are being covered and for how much? If it’s key person, how is that person key to the organization? A business title doesn’t always demonstrate the financial loss to the business of an untimely death.
The underwriter needs to understand the financial impact of the loss of that person’s skills to the business. What are his or her unique skills, and how has this been quantified in the sale? All of this information in a good cover letter will give the underwriter most of what is needed to make a decision. Without the letter or with an incomplete version, there will likely be correspondence back and forth with the advisor to get the requisite information, taking up valuable time.
Don’t withhold information
Never tie the underwriters’ hands by telling the inspection company not to ask certain information unless you have cleared this first. Underwriters need appropriate checks and balances to make sure they have a complete and comprehensive understanding of the applicant’s medical and financial history before committing the company to the risk. We see many inspection reports where the inspection company has been told by the advisor not to ask any financial questions. Instead of being able to approve the case when the inspection report comes in, the underwriter needs to regroup and try to develop this information elsewhere.
In fact, companies are getting policies underwritten and into the hands of the advisors with growing rapidity. Recent studies have shown that placement time has been reduced by four to six days since 2012. The two main factors driving this change? Technology and people.
Technology
Large investments in smart systems and electronic applications are paying off. Information gets to insurance companies in a format that is complete, easily transmissible and typically with enough information to enable to them to quickly process the application and get back to the advisor.
Expert underwriting systems that prescreen an applicant’s responses to questions allow underwriters to focus their attention on outliers – people applying for large amounts of coverage, those with significant medical history, those engaging in risky avocations or older ages.
Technology responds to changing demographics and customer profiles. Younger users are tech-savvy and demand an immediate and transactional approach. New, simplified products for life and critical illness appeal to this mindset. With shorter application forms and fewer underwriting requirements, the policy can be in the purchaser’s hands much more quickly. Embracing these electronic application systems will support continued improvement in turnaround times and reduce the number of amendments required on policy delivery.
For those who still prefer to use a paper application, ensuring that the forms are fully completed before submitting them to head office will ease handling. Incomplete or missing information can prevent the case from being set up and rather than being issued quickly, it’s referred to a pending queue to sit while the advisor has to track down the applicant for missing information. Each handling increases the wait time and threatens the success of the sale.
People
Increased use of tele-interviewing and conscious efforts by insurance companies to reduce the number of Attending Physicians’ Statements [APS] have been contributing to faster turnaround times, too. The advisor can play a key role in reducing waits by preparing a client for the tele-interview, paramed, blood draw or call from the inspection company. That way there are no surprises. The applicants understand the kinds of questions they will be asked and tests that will be done. Time isn’t wasted due to rescheduling or call backs for missing information such as medications, names of specialists, reasons for the consultation and tests completed.
Advisors’ preparation should include coaching applicants to give full disclosure during the tele interview. For underwriters, their job is to dig deep into the facts to get the truth. Full disclosure by the client will speed up the process and ensure there are no surprises at claim time. In many cases, the more comfortable clients are with answering the medical and non-medical questions and the more information they can provide to the interviewer, the less likely underwriter will have to resort to an APS to fill in the details.
That being said, APS reports are valuable tools in risk assessment – particularly for older people with significant medical history, including cancer, heart disease or diabetes.
This is where the placement time gets longer. The wait for a doctor to respond is out of the underwriter’s control, and some companies have reported it can take an average of 18 days to get an APS.
That’s why insurers need to know up front about every doctor a client has seen – not just their usual physician. Imagine waiting for the APS, only to discover that a second report must be obtained from another doctor who wasn’t previously mentioned.
This is a detail-driven industry, so sweat the small stuff. Don’t skip questions – get doctor names, medications, dates seen, etc. There can never be too much detail. The more information the underwriter has upfront, the fewer questionnaires, phone calls, doctors’ reports and amendments.
Certain markets, such as the mature age markets, call for special handling. Be prepared for more requirements when dealing with complicated medical history, multiple impairments and more than one doctor’s report.
Will we ever get to the day of 100% instant issue coverage? I doubt it. However, we can and are getting better at getting policies into the client’s hands quickly and efficiently, and this is good news for all. We have a mutual goal to put profitable business on the books. Underwriters are trying to balance risk assessment, cost and time to underwrite. A very important consumer need is satisfied, insurance companies are putting good business on the books, and advisors are compensated.
At the end of the day, we’re all in this together. Communication, respect and openly sharing knowledge are the keys to success.
The biggest do’s and don’t’s for advisors
Do include a cover letter
I can’t overstate the value of a cover letter. By the time you’ve had the client fill out an application, you’ve invested substantial time and energy meeting with him or her to develop a personalized financial plan. You understand the applicant’s needs and motivation for purchasing life critical illness or disability insurance. Telling the underwriter this type of background – the purpose of the coverage and how the face amount was determined – will go a long way to ease your case through the underwriting process.
If the insurance coverage is necessary to secure a loan, provide the loan details. If it’s business-related, will it cover share redemption, buy/sell, key person? What other business members are being covered and for how much? If it’s key person, how is that person key to the organization? A business title doesn’t always demonstrate the financial loss to the business of an untimely death.
The underwriter needs to understand the financial impact of the loss of that person’s skills to the business. What are his or her unique skills, and how has this been quantified in the sale? All of this information in a good cover letter will give the underwriter most of what is needed to make a decision. Without the letter or with an incomplete version, there will likely be correspondence back and forth with the advisor to get the requisite information, taking up valuable time.
Don’t withhold information
Never tie the underwriters’ hands by telling the inspection company not to ask certain information unless you have cleared this first. Underwriters need appropriate checks and balances to make sure they have a complete and comprehensive understanding of the applicant’s medical and financial history before committing the company to the risk. We see many inspection reports where the inspection company has been told by the advisor not to ask any financial questions. Instead of being able to approve the case when the inspection report comes in, the underwriter needs to regroup and try to develop this information elsewhere.
