19JULY 2022When I have the opportunity to speak to agents and Marketing General Agencies, or MGAs, I use the term Help Us, Help Youon the surface. Had the agent initially addressed upfront the missing pieces like the "goodwill" of the client to the company, percentage of company ownership, and creation of the software program, it would have provided a more holistic understanding of the"why" and "how" the face amount was determined. Case in point: a properly prepared agent cover letter is important to include when a file is being submitted. It helps the underwriterarrive at an informed decision and avoid unnecessary delays. If a cover letter isn't used, a summary of these missing factors on the application, email, or a phone conversation is also helpful.Underwriters need complete information upfront to help assess risk ­ our primary job. The underwriter's main objective is to protect their company's mortality risk and to ensure that coverage amounts are financially justified. Each of us must adhere to our company's guidelines, underwriting philosophy, and risk tolerance. Therefore, the more we know up front,the greater the chance of the client having a better customer experience throughout the underwriting process. Help us, help you.Understanding accelerated underwritingMost life insurers have either-or options, or they are currently in development. The industry has seen a rapid advancement of these programs over the past two years. Demonstrating responsiveness to the COVID-19 pandemic, qualifying face amount limits were raised and age criteria expanded by many companies. Available third-party data tools were often used in greater measure to help fill in the gaps fromsome temporarily unavailable traditional underwriting measures. This experience taught us that digital underwriting is here now. And it is here to stay.Accelerated programs are less invasive, and have improved timeliness, service, and overall customer experience. By incorporating other third-party data elements, a proposed insured may not need to complete medical lab requirements or have their medical records reviewed. Often, clients can enjoy a faster turnaroundfrom submission to approval and delivery of the contract. This is a truly a win-win for all involved. Yet challengesstill remain when it comes to providing underwriting solutions in the accelerated and simplified space, including:· The type and amount of data supplied from third-party resources necessary to make an underwriting offer;· Product pricing that is appropriate for the underwriting risk class;· The regulatory environment which varies from state to state;· New diseases and viruses (i.e. COVID-19) and their potential long-term effects;· Anti-selection (i.e. tobacco, build, and income);·Data reliability;· Communication to the agent when an individual does not qualify for accelerated underwriting.Possible solutions to address these challenges exist, like:· Staying up-to-date on state regulation activities and proficiently applying underwriting approaches and tools in the impacted areas;· Using vendor tools that help identify any recent diagnosis and hospitalizations;· Incorporating behavioral science and third-party ID verifications;· Setting expectations with the producer on what circumstances may qualify for accelerated business and why knock-outs to full underwriting may occur.As the life insurance industry looks to expand and further refine its underwriting solutions through the use of data, the ability to remain agile is critical. Over the past several decades, the underwriting landscape has evolved and looks completely different today than in years past. With more refined accuracy, technology and data sources will become critical tools for risk assessment.From a medical perspective, advancements in medical treatments continue to progress with both ongoing research efforts and new medications coming to market. While unknown diseases may evolve, cures may be found for those or other conditions. From a financial perspective, companies will develop new life insurance products and the financial landscape of our economy will continue to change over time. In the midst of great transition, some underwriting factors remain unchanged. Underwriters understand the need to review a risk holistically, appreciate where risk opportunities and threats may lie, and value the importance of maintaining solid relationships with our distribution partners, reinsurers, and vendors. These key elements will always be necessary for successful underwriters no matter what route is chosen ­ be it automated or traditional business.
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