Whether writing small, medium, or large-group medical business, the process through which agents and carriers work to underwrite cases can often be arduous and imprecise — but it doesn’t have to be that way.
Carriers differ somewhat in their underwriting philosophy and methods when working with agents, but generally the effectiveness of the process depends on cooperation and close collaboration between agents and carriers, along with the use of high-quality and complete data to accurately measure risk and liability exposure. The more confident an agent is in this regard, the better, particularly when it comes to fundamental facts such as historical and current employee participation, employer contribution, carrier tenure, and rate history. It is also critical to understand large cost claims and the resolution of these claims with regard to ongoing expense.
Without a doubt, cost and claims play a major role, but it is also about the quality of the relationship and the win-win-win results for the agent, client, and carrier. To drive a high-performing, efficient, and effective underwriting process, agents need to do the following:
1. Know the facts of your case – In addition to the underwriting criteria discussed above, agents should gather as much additional employee health and benefits data as possible — along with company financial and industry information — to promote why their case is a good fit for the carrier. Ultimately, agents should make sure they understand the data and presentation format desired by the carrier, do their homework, and submit a high-quality proposal request along with complete and accurate data.
2. Establish and maintain a relationship with the account executive – Agents and the carrier representatives upon whom they rely to quote and renew business share a common bond in that both want to write and retain the business. Frequently, the carrier representative has to have the relationship with the agent to write business, but just as often, the agent has to take the initiative to develop a genuine relationship with their carrier representative. The carrier representative can be a valuable coach in helping to position and present the case to underwriting.
3. Know your underwriters – Increasingly, carriers are getting their underwriters out in the field to interact with key agents. Agents should take advantage of such opportunities and get to know the underwriters. If this is possible, agents should consider a visit to corporate headquarters to make an introduction or at least request that their account executive facilitate an introductory call. These meetings can be valuable in terms of getting to know what data and types of business underwriters are looking for. All of this can be used by the agent to better position cases, with the established personal relationships giving the negotiation process a boost.
4. Leverage employee health, benefits, and financial analysis tools – In today’s complex employee health and benefits marketplace with its high-deductible health plans, health care reimbursement arrangements, health savings accounts, and new value-based defined benefit plans, agents are turning by necessity to sophisticated health data analysis, reporting, and benefits modeling tools. These tools, which typically rely on insurance carrier and pharmacy benefits management claims data, are being used to assess population health, identify key cost drivers, and develop client specific benefit design and program strategies. Rather than relying on the limited standard and often expensive and untimely ad hoc reports provided by carriers, agents can use these systems to augment what they receive from the carrier to elevate the quality of the underwriting process. This data is generally of higher quality and more complete than what underwriters have used in the past.
In a health care era where health data, quality, and pricing transparency are the mantra and consumer-oriented health care and value-based plan models populate the landscape, underwriting processes will undoubtedly evolve. Agents who strive for positive results for their clients and the carrier and who actively and skillfully collaborate with underwriters will enjoy a better experience and benefit from superior results.
Ernest Youngblood is the founder of NavigatorMD, a firm offering health data analytics software to support the insurance market. He can be reached at 888-462-8428.