Post on 18-Dec-2015
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Underwriting update with AIGUnderwriting update with AIG
Success through partnership
November 2005
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Update
• AIG process
• What have change
• Why do we rate?
• Hot topic – new immigrant, travel, non resident, financial update
• How to speed the process
UnderwritingUnderwritingOntario Underwriting Team
• Life Product
– Stuart Gray, Barb Cornwall, Judi Scetta, Chantal Lacoste, Janet Nosko, Kirti Sharma, Angèle Houle
• CI Product
– Luc Jodoin
• Policy Changes / Assurance Product
– Christian Ah-Kian
• Helene Chatelain, VP U/W & NB
• Serena Galea, Manager NB
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What you need to know
• U/W age and amount guidelines per product
• Long App vs. Rapid App?
• Most common inquiry –travel, medical
• Financial guidelines– Income, net worth, financial questionnaire on
long app– Purpose, where premium are coming from,
which sales concept was use…
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What have changes and why– Reinsurance change – Reason why:
• More quota share due to high reserving and capital requirements for direct Co.
• Pricing rates – preferred, etc
• Fight for market shares
• Less risk kept by direct Co
• Changes in reinsurances treaties
• Audits review – claim review
– How do we now manage these changes
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Reinsurance issue• Reinsurance issue• AIG use 3 reinsurers
– Travel issue –product, amount length of time, where.
– Capacity issue
– Shopping issue
– Misrepresentations issue
UnderwritingUnderwritingUnderstanding and Explaining Mortality
and Medical tests
• Why do we rate?
• Height and weight table
• Cholesterol table
• Blood profile
• Urine test
• Saliva testing
• Other test
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Rating why?• Underwriting is the evaluation of medical conditions
and histories that may affect the mortality or morbidity.
• Mortality is the relative incidence of death among a given group of people
• Morbidity is the relative incidence of sickness or disease among a given group of people
• Standard mortality is represented by 100%
• Additional rating indicate the degrees of the extra risk
• The rating needs to compensate for the anticipated increase in mortality or morbidity.
UnderwritingUnderwritingLife Expectancies (75-80 basic tables)
• Male-Non-Smoker• Age 100% 200% 400
• 30 50 43 37
• 50 32 26 20
• 65 20 15 12
• Male Smoker• 30 44 36 30
• 50 26 20 15
• 65 17 12 9
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Height and Weight table
5.4 5.6 5.8 5.10 6.2 Rating
93-96 98-101 103-106 109-112 120-124 +40
163-167 172-177 182-186 192-197 212-217 Std
189-198 200-209 211-221 222-233 246-257 +20
199-206 210-217 222-229 234-242 258-267 +30
214-219 226-231 238-244 252-258 278-285 +50
240-246 253-260 267-274 282-289 312-320 +100
293-301 309-318 326-335 331-343 333-365 +300
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Cholesterol table
CHOL/HDL LDL/HDL CHOL CHOL Rating
<8.0 <4 <250mg/dl <6.47mmol/l +0
8.0-9.5 4.0-6.3 250-299 6.47-7.75 +25
9.6-15 6.4-8.5 300-349 7.76-9.04 +50
15.1-20 8.6-12.0 350-400 9.05-10.34 +100
>20 >12.0 >400 >10.34 IC
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Blood profile results• Name, D.O.B• Time collected• Time last meal• Hiv• Glucose• Fructosamine• HGB A1C• Bun• Creatinine • Alk. Phos• Bili. Total
• SGOT (AST)• SGPT (ALT)• GGT (GGTP)• HAA/CDT / Hep. Screen• Tot. Protein• Albumin• Globulin• Cholesterol• HDL/LDL• Ratio• Triglycerides
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Urine test result
• Diuretics agents
• Cotinine
• Cocaine
• Glucose
• Protein
• Leukocyte screen
• Hemoglobin screen
• Wbc
• Rbc
• Granular cast
• Hyaline casts
• Specific gravity
• Temperature
• Creatinine
• Prot./creat. Ratio
• Adulterant tests
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Common problems in underwriting
• Diabetes
• Myocardial Infarction
• Cancer
• Life style – travel, financial
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MYOCARDIAL INFARCTIONMYOCARDIAL INFARCTION
• NUMBER OF EPISODES• CHEST PAIN• SURGERY / BYPASS• CURRENT CONDITION• SMOKING• AGE AT ONSET• OTHER IMPAIRMENT ( BP, CHOL, SMOK...)
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Cancer
• Age at Onset
• Type / Grade
• Localized / Metastasis
• Treatment / date of last treatment
• Surgery
• Recurrence
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Medical Underwriting: Additional issues
• Repeat testing and Rechecks• Smoker – Non Smoker • Saliva vs. Urine• Travel issue• Life style issue• Medical reconsideration• Medical Underwriting Appeals• Clinical medicine vs Insurance Underwriting• Privacy Issue
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Most common inquiryNon Resident?
• A Canadian Citizen living outside of Canada?• Needs to have a Canadian Residence Status
– Paying Canadian Income Tax (T4)– Residing in Canada for 183 consecutives days.
UnderwritingUnderwritingMost common inquiry
New immigrants (Life vs. CI)
• Canadian Resident Status• Paramedical• Blood test including Hep. B & C• Financial Quest.• Need to have landed status• Covering letter explaining the purpose of
insurance and explanation of the source of the deposits.– Only Canadian assets will be considered.
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…Most common inquiryInsurable Interest / Ownership
• Ownership, Beneficiary and Relationship are needed on the application.
• Insurable Interest must exist at uw and issue time until the policy is settled.
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Financial underwriting Why?
• Establishes need• Reduces anti-selection• Reduces moral hazard• Reduces speculation
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Insurable Interest / Why ?
• Must be determined at the time of underwriting• Purpose of the insurance?• What is the financial loss if the insured dies?• Does the amount make sense?
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How? / Communication is the key
• Communication between underwriter & broker & administrator
• Communication between underwriter & reinsurer
• Was FQ completed giving income and NW?
• Financial or medical explanation
– What are we trying to accomplish or achieve
– What are you looking for?
– Was the case shop elsewhere?
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Red flags
• Applicants is reluctant to provide information• Large discrepancies in information provided by
different sources• Lack of third party verification• Broker/Marketing pressure• Previous bankruptcy• Unable to justify the face amount on the older
person
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How do we make it happen !
• Reinsurer is taking majority of the risk• 3 way relationship• Set expectations• Communication is the key!• Presenting your case.
UnderwritingUnderwritingYour best tool?
To accelerate the U/W process!• Did the producer provide a covering
letter explaining the following: – the purpose of the insurance – How was the amount
determined?– Where is the deposit coming
from?– Explaining the concept use– Was sales presentation made if
yes is it attached to the application.
• Is the client aware of all requirements needed.
• Was a NB cover sheet submitted?• Was the case sent to other carrier?• What are we trying to achieve
UnderwritingUnderwritingExample of a covering letter
• Attached are the following documents and explanation.
1.1. The purposeThe purpose – is ….
2. Relationship between agent and applicants – is…
3. Strategy overview – the projected income tax liability on death is x.xx and after factoring the tax saving attributable to a x.xx on death…an amount of xxx is needed no cover the tax liability…
4. Source of premium – the premiums are funded by the corporation…
5. Financial information – financial statement attached
6. Existing life insurance coverage is xxx
7. Concurrent applications – because a total of x is needed.
8. Conclusion – why make sense.
UnderwritingUnderwritingHow to accelerate the process –
What needs to be submitted with the application
• Understanding Insurable interest – borrowed life• Amount of Insurance – need to be justified• Requirements are they ordered?• Rule out anti-selection – piece meal information• What sales concept is being used?• Rule out money laundering• Presenting the case to the u/w – updated info• Medical cover letter• Marketing / sales pressure
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Conclusion• We promise to continue to deliver the following:
An Approachable Underwriting & NB team along with your Regional Team – we are there to help you!