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Life Underwriting Reality An Independents Assessment Hank George, FALU, CLU, FLMI Educator, Consultant & Curmudgeon Presented at ACLI Reinsurance Executive.

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Presentation on theme: "Life Underwriting Reality An Independents Assessment Hank George, FALU, CLU, FLMI Educator, Consultant & Curmudgeon Presented at ACLI Reinsurance Executive."— Presentation transcript:

1 Life Underwriting Reality An Independents Assessment Hank George, FALU, CLU, FLMI Educator, Consultant & Curmudgeon Presented at ACLI Reinsurance Executive Forum January 10, 2012 in Naples, Florida

2 Hank who? Lay medical officer/medical manual writer at Northwestern Mutual, Senior Vice President/Client Support at HORL/LabOne, President of Hank George, Inc., 2002-present 175 medical underwriting courses; mean 25 pages and 100 literature references 400 books and articles; only books ever for producers about underwriting Creator of worlds only super-simplified medical manual Hanks Rx Guide on-line pharmaceutical underwriting resource 50 seminars for Society of Actuaries 150 insurance and medical organizations addressed on 5 continents 2-time MDRT main platform speaker Founder and first chair, LOMA International Underwriting Congress Author of free 30-page monthly Hot Notes with 1700 subscribers in 55 countries Free information clearing house site InsureIntel with 1500 registered members 2 life underwriting study groups; 60+ members Columnist in NAILBA Perspectives, Bests Review, ALUCA Risk-e-Business, On the Risk Annual Developments in Underwriting lead article in LOMA Resource

3 This Roadmap is available free on-line

4 Every reinsurance underwriter should spend 3 months working for a brokerage market insurer. Then, another 3 months working for a brokerage general agency.

5 Life Insurers and Engines Revelations from the 2011 Underwriting Engine Survey

6 Engine Use Status

7

8 Where did/will you get your engine?

9 Why do you covet an engine? As ranked by respondents #1 Reduce app-to-issue cycle time #2 Lower acquisition costs #3 Improve underwriting data

10 % fully-underwritten accepted by engine without intervention by Homo sapiens Miles to go…

11 Engine Peddler Snake Oil You can make your own rule sets…its easy! Youll have it up and running in no time!

12 Purchase-to-Operational Interval Designated as #1 Engine Drawback Time to and cost of implementation Time to and cost of implementation

13

14 Do you offer or plan to offer within the next 3 years a super-simplified life product for the middle market? YES! 60.4% of Study Group Member Respondents

15 Super-Simplified Formula 7 to 14 risk-related questions Drivers: teleinterview, Rx profile, MIB, MVR Preferred, standard and one rated class (At least) $ K to age 40/45 Price competitive with fully-underwritten Targeting middle market Alternative distribution prominent

16 What would YOU say to reinsurer CEOs? Reinsurers need to be on the cutting edge in partnership with their clients re: reaching the middle market with super-simplified. I think they will see even more small and middle-sized companies looking to increase retention without such support. Chief Underwriter

17 PREDICTIVE MODELING Lab Test/Paramedic al Measurements Personal Purchase Records Social Media Sites

18 * Being Piloted ** In Development ExamOne Risk IQ* CRL Smart Score* Heritage Open Mortality Scoring System** Lab/Paramed Risk Scoring

19 Lab/Paramed Scoring in a Nutshell 10% 80%

20 The 5 Horsemen of the Lab/Paramed Scoring Apocalypse

21 If preferred mortality is already profitable, why shell out $$$$ for this? Are the vast majority of the other 80% merely redundant? How can I sell standard/rated to a producer whose client meets our preferred criteria? How can I avoid hell to pay on reinsurer audits if I gave preferred (or better) rates to applicants who do not satisfy our treaty preferred criteria? and…

22 All normal tests are normal, but some normal tests are less normal than other normal tests. (with apologies to George Orwell)

23 Social Media Site Foraging will be Rampant Will antiselection be rampant as well?

24 It would be a HUGE BLUNDER for insurers to use personal purchase records in life underwriting! It would be a HUGE BLUNDER for insurers to use personal purchase records in life underwriting! - Hank George

25 R.I.P. Treadmills ECGs M.D. Exams R.I.P. Treadmills ECGs M.D. Exams

26 Preliminary responses to Requirement Survey and a 25-company Study Group Survey Already Using Will Soon Rx Records 78%22% NT-proBNP40%44%

27 Take-Home Message


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