0 life and a&h september 13, 2012 april, 2013 connecting the financial dots tom webb director,...
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Life and A&H
September 13, 2012April , 2013
Connecting the Financial Dots
Tom Webb
Director, Underwriting
American General
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Life and A&H
Does financial underwriting really matter?
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Life and A&H
What percentage of claims over a million dollars has a financial component?
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Life and A&H
What percentage of every term premium dollar is allocated to claims?
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Life and A&H
Term Insurance – 60% of every premium dollar goes to cover claims-- Even small changes can have significant a impact to profitability
A 2% reduction in claims results in a 25% increase in profitability
Distribution of Term Premium
14%
12%
6%
60%
8%
Compensation Acquisition Expense
Maintenance Expense Claims
Profit
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Life and A&H
What are the dots?
Internet
Tax Transcript
Inspection Report
Cover Letter
Financial Supplement
Application
APPROVAL
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Life and A&H
Data
Financial Data - Income, and Net Worth
Beneficiary data – Insurable Interest
In force Data – Total Line justification
Ownership Data – Business component
Historical data – Prior applications, Bankruptcy, other applications
Effect
Sets the Stage
Eliminates Amendments
Faster Issue
Smooth Claims process
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Life and A&H
Financial Supplement
State Filed
Specific information
Breakdown of Finances
Confirms Data portion of Application
Effect
Part of the policy
Greater Justification
Ties case information together
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Life and A&H
Cover Letter
Who writes the letter?
What do you include?
Where?
When do you write a cover letter?
Effect
Writing agent and sometimes BGA
Anything that needs clarifying or explaining
Attach to application
Whenever the case is important to you!
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Life and A&H
Inspection Report
Carrier Specific
Medical and Financial
Older Ages
Can be confirmed
Effect
Does it match?
ADL’s and Cognitive
Taped
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Life and A&H
Internet
Esearch-comprehensive search of public information on an applicant
Google, Zillow
Credit Report
Social Security
Effect
Verify property values, addresses, and ownership reported by the primary insured on the application.
Expanded and more comprehensive credit information
Detailed judgment, tax lien information, pending legal actions, foreclosures, and criminal activity
Confirms valid number
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Life and A&H
4506T – Tax Transcript
IRS form
Personal
Confidential
Brief
Effect
Fast
Two years of basic data
Common form
Only personal
All US Citizens/Permanent Residents should file a tax return.
Foreign nationals/ visa holders require a comparable independent source of financial information (i.e., brokerage statement)
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Life and A&H
Questions?
