Docstoc

UNDERWRITING

Document Sample
UNDERWRITING Powered By Docstoc
					                          Underwriting




Underwriting update with AIG


   Success through partnership
        November 2005
                                          Underwriting
                        Update
• AIG process
• What have change
• Why do we rate?
• Hot topic – new immigrant, travel, non resident, financial
  update
• How to speed the process
                                                         Underwriting
                    Ontario 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
                              Underwriting
                The process

• Using AIG’s tools
  – FMIS
  – NB phone team
  – Region Team
                                     Underwriting
               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…
                                     Underwriting
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
                                           Underwriting
               Reinsurance issue
• Reinsurance issue
• AIG use 3 reinsurers
   –   Travel issue –product, amount length of time, where.
   –   Capacity issue
   –   Shopping issue
   –   Misrepresentations issue
                              Underwriting
Understanding and Explaining Mortality
          and Medical tests
•   Why do we rate?
•   Height and weight table
•   Cholesterol table
•   Blood profile
•   Urine test
•   Saliva testing
•   Other test
                                         Underwriting
                   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.
                            Underwriting
           Life 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
                                          Underwriting
                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
                                            Underwriting
                   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
                                 Underwriting
            Blood profile results
•   Name, D.O.B      •   SGOT (AST)
•   Time collected   •   SGPT (ALT)
•   Time last meal   •   GGT (GGTP)
•   Hiv              •   HAA/CDT / Hep. Screen
•   Glucose          •   Tot. Protein
•   Fructosamine     •   Albumin
•   HGB A1C          •   Globulin
•   Bun              •   Cholesterol
•   Creatinine       •   HDL/LDL
•   Alk. Phos        •   Ratio
•   Bili. Total      •   Triglycerides
                                       Underwriting
                 Urine test result
•   Diuretics agents    •   Granular cast
•   Cotinine            •   Hyaline casts
•   Cocaine             •   Specific gravity
•   Glucose             •   Temperature
•   Protein             •   Creatinine
•   Leukocyte screen    •   Prot./creat. Ratio
•   Hemoglobin screen   •   Adulterant tests
•   Wbc
•   Rbc
                                     Underwriting
     Common problems in underwriting


•   Diabetes
•   Myocardial Infarction
•   Cancer
•   Life style – travel, financial
                             Underwriting
      MYOCARDIAL INFARCTION

•   NUMBER OF EPISODES
•   CHEST PAIN
•   SURGERY / BYPASS
•   CURRENT CONDITION
•   SMOKING
•   AGE AT ONSET
•   OTHER IMPAIRMENT ( BP, CHOL, SMOK...)
                                Underwriting
                   Cancer

•   Age at Onset
•   Type / Grade
•   Localized / Metastasis
•   Treatment / date of last treatment
•   Surgery
•   Recurrence
                                     Underwriting
       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
                                  Underwriting
            Most common inquiry
              Non 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.
                                      Underwriting
               Most 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.
                                    Underwriting
                …Most common inquiry
          Insurable 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.
                                   Underwriting
             Financial underwriting Why?

•   Establishes need
•   Reduces anti-selection
•   Reduces moral hazard
•   Reduces speculation
                                      Underwriting
               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?
                                                Underwriting
            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?
                                   Underwriting
                     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
                                       Underwriting
              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.
                             Underwriting
       Your 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
                                                     Underwriting
                  Example of a covering letter
•    Attached are the following documents and explanation.
1. The 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.
                                      Underwriting
           How 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
                                      Underwriting
                  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!
                             Underwriting
                Questions?
• Thank you for your
  business!

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:27
posted:11/3/2011
language:English
pages:31