Carrier Study Reveals Many Positives In The Use Of Tele-Underwriting
While proponents of tele-underwriting contend that the method is less expensive and more accurate than the traditional underwriting process, a nagging question has been whether the savings realized are offset by poorer mortality experience.
Now, one study shows that carriers who have implemented tele-underwriting, which shifts the collection of medical information from the agent to the carrier, unanimously agree that the process has not resulted in any negative impact on mortality.
“It was either very positive or it was neutral,” says Jonathan Crumiller, author of the study and chief operating officer for Princeton Consultants, an information technology and management consulting firm based in Princeton, N.J.
The participating carriers chief underwriter or underwriting manager was the primary respondent for the study. Companies surveyed have been using the tele-underwriting process between 1.5 and 10 years, with an average of 5.3 years. While more time is needed for a complete mortality study–at least 20 years–Crumiller feels that “we reached a point where we could draw some initial conclusions.”
“Whats significant is that none of the underwriters have seen any sort of spike or discernable negative change due to tele-underwriting,” adds Dominique Ellner, marketing manager for Princeton Consultants.
According to the report, 78% of respondents stated that mortality experience was not impacted by the tele-underwriting process, while 22% said they had actually seen improvements in experience as a direct result of tele-underwriting practices.
“We actually expected a few negatives,” says Crumiller. “The ones who said it [mortality experience] was more favorable, said it was definitely more favorable–there was no question in their mind they were getting better results.”
Furthermore, the Princeton study reveals that there was a significant decline in the number of attending physician statement (APS) requests by underwriters reviewing tele-underwritten cases. There was a weighted average reduction of 45%, according to the study.
This is true for Safeco Life and Investments, Redmond, Wash., which has seen no change in its mortality experience but has seen a reduction in the number of APS requests, according to Mike Madden, assistant vice president individual life new business.