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Life Underwriting RealityLife Underwriting RealityAn Independent’s AssessmentAn Independent’s Assessment
Hank George, FALU, CLU, FLMIHank George, FALU, CLU, FLMIEducator, Consultant & CurmudgeonEducator, Consultant & Curmudgeon
Presented at ACLI Reinsurance Executive ForumPresented at ACLI Reinsurance Executive Forum
January 10, 2012 in Naples, FloridaJanuary 10, 2012 in Naples, Florida
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Hank who? • Lay medical officer/medical manual writer at Northwestern Mutual, 1973-1985• Senior Vice President/Client Support at HORL/LabOne, 1987-2002• 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 world’s only super-simplified medical manual • Hank’s 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, Best’s Review, ALUCA Risk-e-Business, On the Risk • Annual “Developments in Underwriting” lead article in LOMA Resource
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This
Roadmap
is available
free
on-line
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Every reinsurance underwriter Every reinsurance underwriter
should spend 3 months should spend 3 months working for a brokerage working for a brokerage
market insurer.market insurer.Then, another 3 months Then, another 3 months working for a brokerage working for a brokerage
general agency.general agency.
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Life Insurers Life Insurers and and
“Engines”“Engines”
Revelations from the 2011 Underwriting Engine SurveyRevelations from the 2011 Underwriting Engine Survey
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Engine Use StatusEngine Use Status
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“Where did/will you get your engine?”
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“Why do you covet an engine?”
As ranked by respondents
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% “fully-underwritten” accepted by engine without intervention by Homo sapiens
Miles to go…Miles to go…
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Purchase-to-Operational IntervalPurchase-to-Operational Interval
Designated as #1 Engine DrawbackDesignated as #1 Engine Drawback
““Time Time toto and cost and cost ofof implementation implementation””
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“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
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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
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* Being Piloted** In Development
Lab/Paramed Risk Scoring
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Lab/Paramed Scoring in a Nutshell
10% 10%
80%
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The The 5 Horsemen5 Horsemen
of the of the Lab/Paramed Lab/Paramed
Scoring ApocalypseScoring Apocalypse
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• “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…and…
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““All ‘normal’ tests are ‘normal,’All ‘normal’ tests are ‘normal,’ but some ‘normal’ tests but some ‘normal’ tests
are ‘less normal’ are ‘less normal’ than other ‘normal’ tests.”than other ‘normal’ tests.”
(with apologies to George Orwell)(with apologies to George Orwell)
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Social Media Site Foragingwill be Rampant
Will antiselection be rampant as well?Will antiselection be rampant as well?
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““It would be a It would be a
HUGE BLUNDERHUGE BLUNDER for insurers to use for insurers to use
personal purchase records personal purchase records in life underwriting!”in life underwriting!”
- Hank George
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R.I.P.Treadmills
ECGs
M.D. Exams
R.I.P.Treadmills
ECGs
M.D. Exams
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Preliminary responses to 2011-12 Requirement Survey and a
25-company Study Group Survey
Already Using Will Soon
Rx RecordsRx Records 78% 22%
NT-proBNPNT-proBNP 40% 44%
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Take-Home Message