The time it takes to underwrite a policy is an inherent “problem” that slows down policy issuance, industry experts note.
And while the underwriting process certainly cant be taken out of the equation, carriers are streamlining the entire process, they add.
One technique used by some carriers is the pre-application, where an agent will only take a limited amount of information from a prospect, and then the home office will follow up with a detailed medical inquiry.
This methodology combined with internet technology is helping Zurich Life trim the amount of time it takes to get a policy issued, according to Michael Sladek, senior marketing director of field technology services for Zurich Life, Schaumburg, Ill.
Before introducing its electronic pre-application called Z-app, it took as long as two days for a pre-application to be submitted to the home office compared with the current five-minute turnaround, Sladek says.
The online pre-application was rolled out to Zurichs field in January of this year. Sladeks goal of 10,000 Z-apps this year is about to be met, with 9,775 having been processed through the middle of October. “We think were going to exceed our goal by 20%,” he says.
Agents in the field are able to enter a clients information in an online form; this is an abbreviated application that doesnt include any medical questions. Upon submitting the Z-app, the client will receive a follow-up call from someone in Zurichs home office to complete part two of the application, Sladek explains.
“In the pre-application process, the quicker we get it in the door, the quicker we can make the phone call to fill out the part two,” he says.
Once submitted, it takes about five minutes for the Z-app to get into the workflow system, and the follow-up phone call may come as soon as two hours later. “The key is to get the agent through the client sale as quickly as possible so that he can get on to the next sale,” he says.
Upon completion of the full application, an appointment is made for a paramedic to visit, who then goes over all the information in the application and gets the client signature.
When the information comes back to Zurich, instead of sending it right to an underwriter, it goes to what Sladek calls an “app-readiness team.” This is a new team that makes sure all the forms are in order for the underwriter, but also has limited authority to approve a case. “If all the fluids come back clean and its under $250,000 of insurance, they have clean case authority to approve it and issue it without even going through underwriting,” he says.
The Z-app process is currently only available for Zurichs term life portfolio, according to Sladek.
The Hartford has implemented a similar processing system, using a pre-application at the agent level, and then following up from the home office, according to Michael Keeler, senior vice president of individual life operations for The Hartford, from their offices in Minneapolis, Minn.
“Weve taken all the insurance difficulties off their hands [agents and brokers] and brought them into the home office; they dont have to fill out an app, and they dont have to ask their clients medical questions. Weve made it almost like an annuity ticket for them,” he says.
Keeler explains that for the last 18 months, agents have had the option of faxing or transmitting electronically, a pre-application. Once the pre-app is submitted, the telephone interview process begins. Similar to Zurichs procedure, the agent will try to schedule a time for the Hartfords internal person to contact his client.
“We have about a 90% hit rate at making that appointment the broker had scheduled,” he says.
The telephone interview, Keeler continues, is structured to get all the information needed from the prospect–thus eliminating any follow-up communication prior to policy delivery. Keeler refers to this as a “once-and-done” philosophy.
“We have very few instances where we have to call the client back to get more information,” he says.
Another procedure that Keeler feels helps speed the process, is the fact that no signatures are needed on the application until the policy is actually delivered.
“The only signature we need up front is the MIB authorization, which we handle via fax,” Keeler adds. The end result is getting the policy issued 20% faster, he says.
The traditional system Hartford involves working with account executives on more complex cases, which may require more tailored planning and use of different products. Products like second-to-die and certain niche products are not yet available through the new system.
One carrier that would commit to a time frame was Mass Mutual, Springfield, Mass. Using its QuickClose program, company representatives say they can take a policy from application to issue in seven to 10 business days.
QuickClose is a special program that is only offered to people who are applying for a commercial loan and need life insurance as collateral. “Very simply, it is really an expedited underwriting program,” says Phil Klein, director of retail distribution marketing for Mass Mutual, from the Hartford campus.
Under the program, prospects who are in need of insurance to secure a loan work with a Mass Mutual agent to quicken the whole process. Klein notes that the focus is on the agents organizational skills. Agents are trained to schedule the paramedic at the same time they take the application and then submit the entire package. These cases are then tagged for expedited underwriting, says Klein.
“The process really is that the producer has his act together and submits the complete package, then underwriting is able to take the case through the underwriting process and to policy issue,” he says.
Klein explains another contributing factor to getting the policy issued quickly is the fact that there is a motivated buyer. “The only way theyre going to get the loan is to get the insurance,” he says.
Klein adds that there have even been instances where an attending physician statement was needed, and the borrower went down to his doctors office to personally wait for it.
“The loan is usually for someone who is anxious to open a business or expand an existing business. The business owner just wants to get the loan and get on with his business,” he says.
All Mass Mutual products are available under the QuickClose program.
Reproduced from National Underwriter Life & Health/Financial Services Edition, October 28, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.