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Life Health > Life Insurance

Pick Underwriting Partners With Care

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We all have increasing demands placed on us. A customer needs one product then changes his mind and wants something else. Carriers continually evolve their pricing and standards.

As a producer, you need business partners who will make your life easier. One way to find such partners is to work with underwriters at brokerages and insurance companies that understand your needs. How? The chart shows four characteristics to look for in your underwriters. Well review each characteristic here.

Knowledge. It is critical that the underwriter demonstrate knowledge of many companies, many products, and many underwriters. Virtually every case involves more than one company and at least one competing agent or broker, so such knowledge is essential.

As part of this knowledge, a good brokerage underwriter will be able to guide you through the informal and professional application process.

Informal inquiries and trial applications are a reality of the brokerage marketplace. Perceptions and stereotypes regarding informals are often negative, however.

Much of this negative perception can be attributed to the practice adopted by some brokerages of blast faxing informals to many companies–informals that contain huge and poorly prepared files concerning uninsurable or very seriously impaired risks. Typically, these blasts are devoid of summary, analysis and authorization.

Understandably, informals having such scant preparation do not produce positive results. Zero-to-one percent placement rates characterize this category.

By comparison, professionally submitted informals–those that are summarized and analyzed, accompanied by signed authorizations, and that include a range of competitive offers already obtained on the case–have a much better chance.

When brokerages submit such informals, underwriters do, of course, give consideration to the impaired risks about which they are written. But you can achieve far better success if you precede the submission with a telephone call discussing the key factors in the case. Following such preliminary reviews, everyone has a better shot at arriving at successful competitive results.

In short, the professionally submitted category should produce a double-digit placement rate.

Complexity. Brokerage life insurance transactions are often complex because of insurability issues, older ages, serious medical conditions, larger dollar amounts, hazardous avocations, adverse driving records, life style issues. All of the above typify brokerage life insurance applications. Your underwriter should understand these issues and guide you through them.

Team orientation. You need to work with people who have the experience and team orientation to help you. Underwriting success flows from matching a brokerage underwriting teams skill sets with the challenges encountered and presented by the brokerage life agent.

This knowledge is not limited to proficiency in any one underwriting manual. In fact, the experience and advanced knowledge required to perform and compete in the life brokerage arena will include Academy of Life Underwriting credentials, continuing education and awareness of multi-company underwriting manuals.

Such advanced experience determines how effectively the brokerage underwriter will compete. Accepting every applicant at the lowest price is not effectively competing.

The truly knowledgeable competitive underwriter knows that under-pricing every risk inevitably produces disastrous results–adverse mortality experience, which leads to premium increases. The brokerage sales professional also recognizes this pitfall.

Instead, by applying advanced underwriting knowledge and experience, the underwriting professional is more competitive, more often. Combining more underwriting knowledge with more information about a risk presented up front by the brokerage sales professional often enables the underwriter to approve at the best possible class.

Typically, an underwriter with the most important information about a risk does not have to price for unknown information, such as that found when submissions use the “iceberg” principal–e.g. whats below the surface.

By virtue of the client-producer relationship, producers are often the ones most qualified to present the risk profile to underwriters.

Responsiveness. Producers also expect underwriters to do what they say they will do. A few examples are: being responsive, returning telephone calls and solving problems (not creating problems).

One top brokerage general agent professional perhaps said it best. “Twenty years ago, a new producer began sending business to me with one caveat: I hate stress. If you cause me stress, you wont see me or my business. Today, this person is my top producer!”

The same applies in the current climate. Do the underwriters at the brokerage or the company cause stress or take it away? Your underwriter shouldnt cause you stress in any way. Thats really what being easy to do business with is all about.

Knowledge, complexity, experience and responsiveness are key ingredients that make a producers life easier and help them deliver solutions their customers want. As a producer, you shouldnt expect anything less.

is vice president and director of brokerage underwriting at MONY Life Insurance Company, Simsbury, Conn. His e-mail address is [email protected].

Reproduced from National Underwriter Life & Health/Financial Services Edition, November 18, 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.


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