Designing Life Insurance Products For Increasing Consumer Expectations

Melissa Yeoh reports on the recent “Designing Life Insurance Products for Increasing Consumer Expectations” Insights session which discussed current issues and implications for Life Insurance product design, including the legal perspective and considered how the industry could restore the imbalance between consumer and insurer.

Over the course of the recent year, the life insurance industry has come under increasing regulatory and media scrutiny. A key theme emerging is that products are not performing to consumer expectations, with the balance tipped in favour of the insurer. The industry now faces the challenge of addressing and restoring the imbalance between consumer and industry

An Insights event “Designing Life Insurance Products for Increasing Consumer Expectations” was held at the Actuaries Institute in Sydney on 17 October, with Elizabeth Baker (Directory Advisory at EY) leading the discussion, along with Dale Jackson (Associate Director Advisory at EY) and Darryl Pereira (Partner in the Insurance and Financial Services team, TurksLegal).

The session discussed the background of events leading to the current situation with Dale recapping the numerous investigations into the industry that have led to a string of findings such as the Parliamentary Inquiry report, the proposed Federal Budget changes for Insurance in Super, the ASIC 587 Direct Life report and most recently the Royal Commission hearings.

The policy questions arising from the Royal Commission Round 6 hearings were summarised into the following key themes:

  • Low value products
  • Unreasonable exclusions
  • Out of date legacy definitions
  • Confusion over default coverage
  • Confusion over claim thresholds
  • Imbalance in rights / obligations and lack of transparency

Insurers need to question the drivers underlying these themes that have led the industry to where it is today.

Dale referenced an article[1] that posed the following 10 questions a customer should be able to answer about their life insurance:

  1. Are you paying for multiple life insurance policies?
  2. Do your premium costs align with your cover?
  3. What is covered?
  4. What is excluded?
  5. Is there a risk loading?
  6. What do income protection and trauma insurance cover?
  7. How much life insurance do you need?
  8. What does TPD cover?
  9. Insurance default schemes – do they meet your needs?
  10. When should cover be reviewed?

The nature of the questions suggest consumer understanding is low and that this further drives the gap between expectations and reality.

These findings mean the accountability to design products that are suitable to the customers who are sold them is greater than ever. With further legislative proposals being put forward and placing further constraints e.g. limiting access to medical information at time of underwriting and claims assessment, it is imperative that product changes occur to ensure sustainability.

The legal perspective

Darryl continued the discussion by sharing a legal perspective on life insurance product design. The legislative changes focus on member value and the misalignment between actual cover and perceived cover that result in “illusory” cover.

Regulators are also considering member value through the prism of inherent restrictions on cover. Examples of current restrictions which are not always known or understood include TPD cover definition flip, Limited Cover, IP deeming clauses, end of cover provisions due to insufficient account balances and offset provisions.

The speakers also noted that the current opinion based TPD definition has the highest rate of disputes amongst all benefit types and courts often place significant scrutiny on the insurer’s decision process.

Other notable legislative updates include the proposal to extend unfair contract terms protection to insurance contracts, the introduction of the Design and Distribution Obligations Bill and a Parliamentary Inquiry into allowing life insurers to fund rehabilitation.

Product design in life insurance

Elizabeth proceeded to share some approaches to improve the balance of life insurance product design, where the aim is to promote better consumer decision making around insurance cover.

Principles to consider when designing life insurance product should include:

  1. The product itself (should meet consumer needs and not be overly complex).
  2. Product level metrics (should be reasonable and not too high / low).
  3. Individual benefit levels (should meet consumer needs and not be overly complex).
  4. Data (should support pricing, product features and any exclusions).
  5. Product features and eligibility (need to be clear and not create confusion).
  6. Product exclusions (must be necessary and reasonable).
  7. Pricing factors (should be reasonable now and into the future).
  8. Claims (should produce consistent customer outcomes across the customer segments).

Taking up the challenge

The audience were challenged on long standing practices and to think about product design and pricing from the bottom up.

customer and insurer “value exchange” framework was also suggested. Under this framework, the various attributes of a product are assessed and then classified as either meeting, marginal or not meeting customer expectations. Using this framework, the insurer can then determine and agree action items to address areas that do not meet customer expectations.

The life insurance industry has recognised the need to improve awareness and value to customers and initial steps have been taken such as the implementation of the Voluntary Code of Practice. However, as customer expectations continue to grow and evolve, the challenge remains for insurers to re-evaluate existing products by placing a customer lens over the end-to-end process of product design. To do this, a shift in mindset is required from “what can be done” to “what should be done”.

[1] Source: Australian Financial Review 21 September 2018 Duncan Hughes: “Ten questions that could save your life (insurance)”

CPD Actuaries Institute Members can claim two CPD points for every hour of reading articles on Actuaries Digital.

This article was originally published in Actuaries Digital here, by Melissa Yeoh on 25 October 2018.



MELISSA YEOH

Melissa is a Technical Pricing and Product Specialist at AIA Australia and a Fellow of the Institute of Actuaries Australia.

Swiss Re – ALUCA Return To Work Award Winner – Ben Crawley of BT Financial Group

Swiss Re and ALUCA were proud to partner for our third Excellence and Innovation in Return to Work Award this year. BT Financial Group’s submission detailing an innovative wellness recovery program for customers diagnosed with cancer secured the 2018 Award. Ben Crawley of BT has just returned from the International Forum of Disability Management (IFDM) in Vancouver, Canada (the Award prize) and has shared some of his key insights below. We also congratulate CommInsure for their highly commended paper on ‘human insurance’. To read more about the Award and to download all of the submissions, please click here

Carly Van Akker
SWISS RE


I was lucky enough to attend the IFDM held in Vancouver this year after BT Financial Group won the Swiss Re & ALUCA Excellence and Innovation award for Return to Work following our submission paper: Giving customers with cancer an early chance at getting their life back on track.

The forum brought together many professionals who work across the globe in varying stakeholder roles and disability systems such as; social and disability services, workers compensation, and life insurance. The speakers were experts in their chosen fields who presented passionately about ways in which they have applied intervention strategies for bridging the gap and empowering those with a disability to function in society and return to good work. I was amazed at how consistent themes were presented across different developed countries and it has got me thinking on how we can apply new strategies to improve the health outcomes for our life insurance customers suffering from disabilities.

I particularly enjoyed hearing from Francois Perl (Director of Social Services – Belgium), Dr Joachim Breuer (Director General – German Social Accident Insurance – DGUV), Donal McAnaney (Chief Academic Officer at Pacific Coast University) and Graham Halsey (Director of Well Working Matters).

Francois, Joachim, and Donal communicated how the labour market is evolving at a rapid pace. The digitalisation of the modern world is creating new self-employment opportunities and short term contracted work through the “gig economy.” It is important for worldwide occupational health & safety risk systems and social services to keep up with this trend to reduce the new risks of occupational illness and disability, but also provide opportunities of good work for those transitioning into new employment when they may not be able to return to a previous occupation due to an illness or disability.

Speakers communicated on governing policy and the need for the different compensatory systems, social disability services, and life insurers to improve the lines of communication across systems in order to achieve a more coordinated approach improving the speed of appropriate interventions, thus facilitating improved return to good work outcomes for those with a disability. Without a unified approach, the costs and burden of disability will not only decrease the individual’s quality of life, but will also add pressure on social services to support individuals who develop chronic disability and extended absenteeism which inevitably leads to loss of employment.

Given BT’s paper on early intervention for management of cancer conditions, I was very interested in Graham Halsey’s presentation on “People with Cancer – The Hidden Workforce.” Graham, who has worked in the life insurance industry in the UK presented on good work being a part of Cancer treatment giving purpose, meaning and confidence to the individual. Graham communicated on the value of Occupational Rehabilitation support for opening lines of communication with employers and bridging the gap between treating parties for coordinating a safe return to good work.

Whilst the forum was insightful for many reasons, it was evident that managing mental illnesses continues to remain a significant challenge around the world. Disability and absenteeism from mental illness is on the rise in all countries. From the forum it was evident that there is still a stigma surrounding mental illness and a lack of understanding support those suffering, particularly with employer understanding and support networks at the workplace. The stigma of mental health varies significantly from industry to industry and a one size fits all approach for mental illness management may not be the answer. This is the next challenge to find solutions which will identify and provide the right care, support, and coaching to all stakeholders so that those with a mental illness can return to good work in a timely and sustainable manner.”


Ben has over 12 years’ experience across the Occupational Rehabilitation space, which spans across both Group and Life insurance.

He has worked in a variety of roles in an Exercise Physiologist space and involvement in early intervention programs for workplaces injuries, non-workplace related injuries and illnesses.

Ben has a strong passion of the value of appropriate early intervention strategies to support customers in achieving their best health outcomes.

In 2017 Ben commenced working with BT Financial Group with a strong focus on a new early intervention strategy for our customers diagnosed with Cancer and has recently developed a 12 month pilot called Cancer Assist Program (CAP) which was successfully awarded the Excellence and Innovation in Return to Work award.

The 16th ALUCA Biennial National Conference

ALUCA’s premier 16th Biennial National Conference, Innov18-Life Changing, was held from October 11th – 13th at the Grand Chancellor in Hobart and the feedback from  attendees and sponsors at the event has been overwhelmingly positive. More than 500 Life insurance professionals  enjoyed  7 thought provoking and inspiring plenary sessions and were able to chose from 36 breakout sessions all providing key insights into a range of areas.

Delegates learnt about the opportunities and innovations that will lead our industry into the future. The latest developments in Behavioural Economics and big data, technology, wearables, the future of work, resilience and mindfulness were all covered during the three days along with social media & AI, pathology and genomics,  sessions from APRA and an update on the Code of Practice from the FSC and so much more.

In addition to the above, ALUCALAND contained exhibitions from 17 exhibitors where delegates enjoyed catching up and connecting with their fellow peers all from the Life Insurance industry.

The conference concluded with ALUCA’s special Gala dinner where winners of ALUCA’s and key partner scholarship awards were announced in addition to the 2018 prestigious ALUCA Life member award.

The  highly regarded recipient of ALUCA’s 2018 Life Membership is Peter Jones from Cogent Management. Peter has made a significant contribution to ALUCA and the life insurance industry over a large number of years during his career as a Forensic Accountant, positively impacting so many people. Our congratulations to him.

In addition the ALUCA Turks Legal scholarship winner and runners up were also announced and the winners from the ALUCA-Swiss Re Rehabilitation award. A huge congratulations to them all and our sponsors  Swiss Re and Turks Legal who make these awards possible.

2018 ALUCA award winners summary

2018 ALUCA Life Membership: Peter Jones, Cogent

2018 ALUCA Turks Legal Scholarship award Winner: Evgeney Schkola from Comminsure Runners Up: Christine Gan, Comminsure and Aimee Kelly, CommInsure

2018 Swiss Re-ALUCA Rehab award winner : Ben Crawley from BT Financial

A sincere thanks to ALUCA’s amazing conference committee: Lucy Hartley, Lizz Kiernan, John O’Leary, Matt Paul, and Ingrid Thorn who were led by Board members Mary Sinclair-Porter and Sean Potter supported by The Association Specialists conference team.

A HUGE thanks as well to ALUCA’s national sponsors and conference sponsors for supporting such a very important event on ALUCA’s calendar.

The 17th ALUCA Biennial National Conference has been announced for 2020 and will be held on the Gold Coast in October 2020.

Conference photos

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Day 1

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Day 2

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Day 3

Thanks to all 7 people who entered the ALUCA photo booth social media competition. The judges all loved the creative photo shots but unfortunately none of them met the full competition criteria! The good news is that we will look to roll out another competition next year with the same prize attached. Stay tuned for further details…

Life Code Compliance Committee – Update

Busy start for life insurance compliance body

The Life Code Compliance Committee (the Committee) released its inaugural Annual Report on 25 September 2018. The Committee independently monitors subscribing insurers’ compliance with good industry practice, as set out in the Life Insurance Code of Practice (the Code).

The 2017-18 Annual Report outlined a busy first year, in which the Committee:

  • established processes and procedures for its operations and Code monitoring, including launching its Annual Data and Compliance Programme
  • met and inducted all subscribers, clarifying with them compliance obligations and how to report instances of non-compliance
  • investigated Code breach allegations
  • engaged with stakeholders to build awareness of the Code
  • shared its experience and suggestions for improvements to the Code with a submission to the Financial Services Council (FSC)

The Committee’s key purpose is to help the life insurance industry improve its service to customers. In 2017-18, working with the FSC, the Committee developed an online Code breach allegation tool for consumers. The Committee also worked with subscribers to rectify Code breaches and implement remedial action to improve outcomes for consumers.

Subscribers self-reported 23 breaches of the Code, most often concerning policy changes and cancellation rights. The Committee identified two Code breaches through its targeted monitoring of compliance.

The Committee received 747 Code breach allegation referrals, including 711 referred in bulk by a plaintiff law firm. Towards the end of 2017-18, the Committee began investigating a sample of the allegations from the bulk referral, as well as continuing progress on the other 36 referrals.

The Code came into effect on 1 October 2016 and subscribers had a transition period before having to adopt the Code by 30 June 2017. As at 30 June 2018, there were 26 subscribers.

The Committee’s primary role is to:

  • carry out proactive and reactive monitoring
  • make determinations in relation to matters it investigates
  • ensure remedial action is carried out and sanctions are imposed if required.

Committee Chair Anne Brown said: “We aim to achieve robust monitoring of the Code in a timely manner, and provide practical guidance to subscribers on how to comply with the Code.”

“We also want to provide assurance to consumers that subscribers are being held to account in meeting their Code obligations and look forward to receiving sufficient ongoing resourcing to meet those obligations and objectives.”

“It was pleasing to note in ASIC Report 587 the impact the Code has already had on improving the quality of sales of direct life insurance and we look forward to contributing to the next version of the Code during the 2018-19 year.”


The report can be found on the FOS Code website here.

If you have any queries about the report, the Committee or Code compliance, please contact:

Katy Rall
Compliance Manager,
Code Compliance & Monitoring
(on behalf of the Life Insurance Code Compliance Committee)
krall@codecompliance.org.au
(03) 9099 2287

 



Katy Rall, MBBS, ANZIIF Snr Assoc CIP
Compliance Manager – Code Compliance and Monitoring

Katy originally trained and worked as a medical doctor before transitioning to work in the life insurance industry and specifically claims management. She holds a Bachelor of Medicine and Bachelor of Surgery as well as subsequent qualifications of a Diploma in Life Insurance. Katy has worked in the life insurance claims environment for over 12 years covering group and retail insurance, for a number of organisations and across a number of roles, including the assessment of claims, management of a claims team, management of complaint and litigated claims, and technical roles. She joined the Code team at FOS in August 2017 as the Compliance Manager for Committee.

ALUCA Rehabilitation Working Group Draft Position Statement

Over the course of this year, the ALUCA Rehabilitation working group has been developing a draft position statement to highlight principles of best practice occupational rehabilitation for life insurance. The working group is made up of representatives across life re/insurers and occupational rehabilitation companies.

The intention of the position statement is to highlight to stakeholders, the role of rehabilitation in promoting wellness, recovery and where appropriate, return to ‘good’ work. Complementing the overarching position statement will be more in-depth breakouts of each of the principles outlined in the position statement including supporting case studies – these materials are still in development and once finalised, will also be distributed for consultation.

As part of consultation, the ALUCA Rehab working group would really appreciate feedback from members. The feedback will collated, reviewed and changes made as appropriate before the position statement is then finalised for release.

Click here to view the draft position statement and please direct all feedback to Carly Van Den Akker (carly_vandenakker@swissre.com) by 16 November 2018.  We look forward to hearing your thoughts – and thank you!

ALUCA Life Member Award Winner – Peter Jones

What made you want to become a volunteer with ALUCA? 

Having commenced working with the life insurance industry, initially with Prudential, I came to realise the great divide in considering financials as a key element in the underwriting of life insurance applications and assessing of claims. The first person I worked closely with in the industry was Andrew Morrison who has fortunately, recently returned to work with life insurance after many years of experience both within Australia and overseas.

Right from the early stages of working with the industry I realised there was a large divide between underwriting and claims and financial advisors (then known as agents).

I saw the work being done in those days by people like Tom Renny and others in an effort to bring the different elements of life insurance together and this inspired me to be a part of the organisation (ALUCA) that was endeavouring to bring about these changes and provide an education and recognition for those working within underwriting and claims.

What are you most proud of as your time of volunteering with ALUCA?

I would have to say that the thing that has made me most proud during the time that I have been a part of ALUCA is seeing the dedication of the people that I have worked with on the board to bring about the most recent changes to the structure of the Association and particularly from growing from a single point dependency Secretariat to that of having a dedicated Chief Executive Officer and full-time Secretariat. This also encompassed the restructuring of the board and the change in thinking in the aims and objectives of the organisation to encompass the philosophy of educate, develop, connect.

Also to encourage people working within claims to make the opportunity to actually meet face to face with a claimant when given the opportunity.

What is the most memorable ALUCA event / conference that you have attended and why?

Probably the most memorable event that I have attended has been this year’s conference for two reasons.

The first being obviously that I had life membership of ALUCA conferred on me, an honour that I am extremely humble and proud about.  Mainly however, because of all the conferences and events I have been to since joining ALUCA this was the best conference that I have attended both in terms of venue and but more importantly because of the content and the organisation and I would congratulate those in the management, on the conference committee and on the board for achieving such a great result.

What advice do you have for other ALUCA members who are thinking of putting their hand up to volunteer with ALUCA?

To be passionate about the industry they work in and understand that volunteering does not just mean turning up once a month at a committee or board meeting and further to ensure that their employer agrees with and supports their volunteering knowing that their participation will bring benefits to themselves as employee and the company.

What additional skills and capabilities did you gain by being with ALUCA?

Undoubtedly, the ability to fully understand the importance of life insurance in the community and the need for the industry to be diligent and particularly the assessment of people’s claims. This particularly has come about through the opportunity to meet personally with claimants and gain a full understanding from people who actually are suffering and need support offered by insurance cover.

 4 words to describe ALUCA?

Participate, Educate, Develop, Connect

4 words to describe Peter Jones? 

Passionate, dedicated, wine lover

What’s next for Peter Jones? 

Continue to participate and connect with the people in the life insurance industry; spend more time with my grandchildren and travel.


Peter Jones is an accountant who has worked extensively with life insurers and reinsurers in both retail and group areas in Australia and New Zealand since 1985.  He spent six years as a board member of the Australasian Life Underwriting and Claims Association (ALUCA) during which time he was instrumental in upgrading the structure of the association. Prior to joining the ALUCA board Peter participated in the preparation of the Association’s submission to government regarding changes to the Insurance Contracts Act in Australia and two conference programme committees.

2018 ALUCA Life Insurance Excellence Awards

ALUCA’s inaugural 2018 ALUCA Life Insurance Excellence Awards night held on May 24th at Darling Harbour in Sydney was a wonderful testament for the best in the profession to recognise and reward the fantastic work being done by their peers and colleagues.

These special Awards were about celebrating the value great Life Insurance underwriting, claims, rehabilitation and other professionals/services contribute to this vibrant industry.

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Judging Process

In total we received 84 nominations across all of the categories. The smallest amount received being the 4 Underwriting leader entries all from Zurich and the 4 nominations for Underwriting teams.

The papers were judged via a 2 round process. A first round panel of judges marked and scored all of the papers separately and independently. They marked these against the key criteria for each of the award categories using a marking sheet. The scores were sent back and collated at a central level. Judges then met to  discuss the papers and the scores. The top 3 – 4 finalist entries were agreed on for each category.

The finalist papers for each category were then provided to a cross industry and external industry panel of judges who also all marked against the key criteria for each of the award categories via a marking sheet – these were all scored separately and independently. Once again, the scores were sent back and collated at a central level . Judges then met to  discuss the papers and the winners for each category. Any judging bias was removed first via a strong cross industry panel and where papers were very close, to remove any judging bias those 2 judges scores were taken out of the process.

Award  Judges

A huge heartfelt thanks to all of the wonderful judges involved in this process. It takes a lot of time to read and rate each submission against the key criteria. The 23 judges included:

  • Brett Clark, CEO,TAL
  • Mark Senkevics, MD, SwissRe
  • Dion Russell, MD, SCOR
  • Dr Ian Opperman, NSW Chief Data Scientist
  • Tracy Hibbert, CEO, Beyond Aptitude, GM Patties
  • Effie Fox, GM, Samsung
  • Elissa Dwyer, Heart Research Institute
  • Nick Kirwan, FSC
  • Dr Bill Monday, PacificLife Re
  • Peter Tilocca, ANZ
  • Tina Beilby, Zurich
  • Tony O’Leary, G & T Risk Management
  • Malcolm Weir, Comminsure
  • Natalie Cameron, MLC
  • Loraine van Eeden, TAL
  • Paula Bourke, SCOR
  • Carol Smit, ALUCA & AIA
  • Carly van Den Akker – ALUCA & SwissRe
  • Mary Sinclair-Porter, Zurich
  • Amanda Stow, OnePath
  • Devi Uka, ALUCA Deputy Chair, TAL
  • Amanda McKernan, ALUCA CEO & Adjunct Faculty, UNSW
  • Jim Welsh, ALUCA Chair & AMP

Our Thanks

A huge thanks and congratulations to everyone who was nominated for an Award. The judges were very impressed by the high quality of the submissions. Everyone should all be incredibly proud of their achievements. It was very close in a number of the categories.

Many thanks to all of ALUCA’s sponsors too who helped to make these Awards possible. A shout out to our platinum sponsors who each  awarded one of the winners in a category.

A big thanks to our Awards committee who all worked tirelessly to ensure the night ran seamlessly and no envelope mishaps happened like at the Oscars!

Thanks too – to Dean Mico and Lynette Mico the son and widow of the late David Mico who presented the David Mico  Excellence in Life Insurance education award. This special award dedicated in memory and  honour of  David Mico’s contribution to the Life Insurance industry through his work with IFSA (now FSC), he successfully worked to maintain the balance between the freedom to underwrite applications and assess claims fairly and the needs of the community at large. This award acknowledges an individual from the life insurance industry who has excelled in their on-going professional development in Life Insurance via education

Emeritus Professor Ron McCallum, AO
Visually impaired himself, his success as a lawyer, educator, and advocate for blind people is in large part due to technologies like tape recorders, voice synthesizing programs and computer scanning. Ron shared his very personal tale about his life, his challenges and achievements.
He was appointed to a full professorship at the University of Sydney making him the first totally blind person to be appointed to a full professorship at any Australian or New Zealand university. He has served as chair or member of various federal and state inquiries including the 2012 inquiry into the Fair Work Act 2009 (Cth).  All of the audience were incredibly touched by Ron’s story and his quest to champion the rights of the disabled.

MC, Sophie Scott
The MC for the Awards night was ABC Medical reporter Sophie Scott who did an excellent job interviewing all of the award winners and keeping the event on time.

There were also many learning’s for next year – one being that Underwriters are a modest group of professionals!  On behalf of ALUCA thank you for joining us for an evening where we were able to truly celebrate and acknowledge all of the wonderful talent in the Life Insurance industry and the achievements each and everyone has made. Everyone should feel incredibly proud of the enormous and positive difference we make to the communities we all serve.

ALUCA Life Insurance Excellence Awards Night 2019 – MELBOURNE

On that note stay tuned for ALUCA’s 2019 Life Insurance Excellence Awards night to be held in Melbourne. Nominations for all awards will open in November 2018.


ALUCA Life Insurance Excellence Underwriting Team award – winner – AsteronLife Team with Mary Sinclair Porter, ALUCA Board and Tony O’Leary, ALUCA Life Member presenting the award

ALUCA Life Insurance Excellence Awards Finalists & Winners, 2018

The award finalists and winners for each category are listed below with some of the comments we shared at the awards night as to why the winners were selected.

Individual Awards

1 ALUCA Life Insurance Leadership Excellence Award

This award acknowledges an individual life insurance leader who has demonstrated excellence above BAU by driving successful Life insurance strategies with strong customer outcomes.

Finalists & Winner
  1. Chris Austin, AMP Limited
  2. Amanda Ide, MLC Life Insurance
  3. Peter Tilocca, Onepath
  4. Tina Beilby, Zurich Financial Services      WINNER
Judges comments

The judges felt all finalists were ” very worthy recipients’  with a lot of discussion around each of the finalists and their tangible achievements  with a specific focus on leading teams to greater customer outcomes and their contribution to the industry. The winning nomination from Tina Beilby’s team for Tina was felt to have achieved stronger customer outcomes  with very clear tangible outcomes of her achievements and exceptionally strong testimonials both within and outside her organisation.

Prize selected by winner – Complimentary place to ALUCA biennnial conference in Hobart

 

2 ALUCA Life Insurance Claims Excellence Award

This award recognises an individual life insurance claims professional who has demonstrated excellence above BAU via their achievement of key claims business and customer outcomes.

Finalists & Winner
  1. Maieve Annersley, AMP Limited
  2. Ryan Gailey, BT Financial Group
  3. Matthew Austin, CommInsure WINNER
Judges comments

The judges commented that all finalists did demonstrate excellence in this category, However, the winner – Matthew Austin, set himself apart with demonstrably excellent customer outcomes and knowledge sharing, strongly attested to by colleagues, peers and customers alike.

Prize selected by winner – Complimentary place to ALUCA biennnial conference in Hobart

 

3 ALUCA Life Insurance Underwriting Excellence Award

This award recognises an individual life insurance underwriter who has demonstrated excellence via their achievement of innovative underwriting business/customer outcomes over and above BAU.

Finalists & Winner
  1. Roxanne Chapman, Zurich
  2. Stephen Connolly, Zurich WINNER
  3. Sarah Cosier, Zurich
  4. Simon Parry, Zurich
Judges comments

The winner, Stephen Connolly, was felt to be a great all-rounder who went above and beyond expectations of the role with a very sensitive and topical subject that will help underwriters in the daily delivery of underwriting decisions for customers with great use of FAQs to ensure consistency in the message being given to customers.

Prize selected by winner – 6 month coaching package

 

4 ALUCA Life Insurance Rehabilitation Excellence Award

This award acknowledges an individual life insurance rehabilitation professional who has demonstrated excellence via their achievement of innovative rehabilitation business and customer outcomes over and above BAU.

Finalists & Winner
  1. Karen Robertson, AIA
  2. Alexandra Russo, AMP
  3. Rebecca McMurray, Work Rehab WINNER
Judges comments

All finalists had achieved some great outcomes but the judges felt the winning submission for Rebecca McMurray, also provided tangible evidence of  doing more outside of their organisation, not just within. Rebecca also demonstrated innovation in the industry with strong regional  community involvement  with strong proof and tangible evidence of her achievements.

Prize selected by winner – 6 month coaching package

 

5  ALUCA Excellence in Life Insurance Rising Star of the Year Award

This award recognises an individual who has worked in life insurance for under three years who has demonstrated excellence in a claims, underwriting or rehabilitation role above BAU.

Finalists & Winner
  1. Donna McEwan, AMP
  2. Amlan Sharma, AMP
  3. Katie Hartley, CommInsure WINNER
Judges comments

The judges shared that each of the finalists had great submissions, going above and beyond their day to day role with clear outcomes.

The winners submission for Katie Hartley, clearly articulated the accomplishments that she had achieved with some really strong customer outcomes – the judges also noted that the winner included  testimonials from different external companies not just internal ones.

Prize selected by winner – 6 month coaching package

 

6  ALUCA David Mico Excellence in Life Insurance Education Award

A special award for an individual who has excelled in their on-going professional development in Life Insurance via education – open to all Life Industry professionals.

Finalists & Winner
  1. Carola Moore, AMP WINNER
  2. Christine Gan, CommInsure
  3. Daniel Devine, TAL
  4. Katherine Matherson, Zurich
Judges comments

Very strong and varied finalists who were all to be highly commended. Judges were impressed by the finalists ongoing commitment to their professional development.

The winning nomination from Carola Moore demonstrated her broad range of life insurance education showing how she had used her life insurance knowledge to bring a vast range of varied topics into the business to have a direct and improved impact on the customer experience.

Cash prize of $1,500

 

ALUCA Life Insurance Excellence Claims Team of The Year award – winner – MLC Claims Life Insurance team with Chantelle Everett, ALUCA Board and Niamh McCormack ALUCA CMG Chair presenting the award

TEAM AWARDS

All winning teams to receive a bespoke speaker event especially for their teams.

7 ALUCA Life Insurance Excellence Claims Team of The Year Award

This award recognises a Claims team who have shown leadership and innovation as a team in the life insurance claims area that enhances customer outcomes above BAU.

Finalists & WINNER
  1. Fifita Ngaue – CommInsure Claims Team
  2. Alice Chiesa – MLC Life Claims Team WINING TEAM
  3. Jackie Cumming – Qinsure Claims team
Judges comments

The judges said that they felt the winning team  – MLC Life Claims team – addressed many parts of the claims process and achieved highly desirable customer outcomes. Holistically it was a compelling journey that they have been on and they had done something different for their customers – achieving great and tangible outcomes with proof and evidence of this.

 

8 ALUCA Life Insurance Excellence Underwriting Team of The Year Award

This award acknowledges an Underwriting team who have shown leadership and innovation as a team in the life insurance underwriting area that enhances customer outcomes above BAU.

Finalists & Winner
  1. Lisa New – Asteron Life team WINNING TEAM
  2. Gail Jones – CommInsure team
  3. Helen Molloy – TAL team
  4. Matthew Apps- Zurich team
Judges comments

This was another very close decision.  The winning  team – Asteron life – achieved something new and fresh. The finished project not only facilitated customer benefits such as much improved cycle times but also incorporates excellent management information data enabling ongoing improvements. Their team innovation cuts across the whole business. They also demonstrated clear improvements that had a positive direct impact on the customer experience by bringing the underwriter into each customer’s front room.  Although these changes first started in 2015 – they were a leader in change and the transformational part was delivered in 2017.

 

9  ALUCA Life Insurance Excellence Team of The Year Award: Customer Service

This team award recognises teams working in life insurance who have demonstrated an outstanding commitment to innovative customer care to provide great customer outcomes above BAU.

Finalists & Winner
  1. Neil Borthwick – BT Financial team – Claims
  2. Ciaran Curley – CommInsure Claims team
  3. Lucy Hartley – EM Life
  4. Rommel Luzaraz – TAL Direct Claims team WINNING TEAM
Judges comments

The nature of the award is based on customer feedback as well as what is being done to address the feedback. Judges loved the community effort in the winning submission from TAL’s direct claims team and the extra step that this team go to.  They were able to show how they took their customer service to the next level with lots of support and proof of this in addition to a great video clip.

 

10  ALUCA Life Insurance Excellence Team of The Year Award – Innovation

This award honours a life insurance team working in the sector who have shown excellence in life insurance through innovative processes/products/services/data/ technology etc.

Finalists & Winner
  1. Neil Borthwick – BT Financial Claims team WINNING TEAM
  2. Amity McCarthy- Comminsure Digital Claims team
  3. Georgina Lamb – IPAR team
  4. Peter Tilocca- OnePath Underwriting team
Judges comments

This category brought much discussion amongst the judges as two finalists were very, very close but the winning submission from the BT Financial Claims team,  demonstrated their innovation excellence via their customer leading innovation delivering strong customer outcomes.

The  NSW Chief Data Scientist, Dr Ian Opperman who was one of the judges for this category wanted to make mention of the other very strong entry from the  IPAR team who were very impressive – with their depth of innovation which was to be commended.

 

ReB ALUCA Life Insurance Excellence Awards Night

ALUCA’s inaugural 2018 ALUCA Life Insurance Excellence Awards night held on May 24th at Darling Harbour in Sydney was a wonderful testament for the best in the profession to recognise and reward the fantastic work being done by their peers and colleagues.

These special Awards were about celebrating the value great Life Insurance underwriting, claims, rehabilitation and other professionals/services contribute to this vibrant industry.

 

Judging Process

In total we received 84 nominations across all of the categories. The smallest amount received being the 4 Underwriting leader entries all from Zurich and the 4 nominations for Underwriting teams.

The papers were judged via a 2 round process. A first round panel of judges marked and scored all of the papers separately and independently. They marked these against the key criteria for each of the award categories using a marking sheet. The scores were sent back and collated at a central level. Judges then met to  discuss the papers and the scores. The top 3 – 4 finalist entries were agreed on for each category.

The finalist papers for each category were then provided to a cross industry and external industry panel of judges who also all marked against the key criteria for each of the award categories via a marking sheet – these were all scored separately and independently. Once again, the scores were sent back and collated at a central level . Judges then met to  discuss the papers and the winners for each category. Any judging bias was removed first via a strong cross industry panel and where papers were very close, to remove any judging bias those 2 judges scores were taken out of the process.

 

Award  Judges

A huge heartfelt thanks to all of the wonderful judges involved in this process. It takes a lot of time to read and rate each submission against the key criteria. The 23 judges included:

  • Brett Clark, CEO,TAL
  • Mark Senkevics, MD, SwissRe
  • Dion Russell, MD, SCOR
  • Dr Ian Opperman, NSW Chief Data Scientist
  • Tracy Hibbert, CEO, Beyond Aptitude, GM Patties
  • Effie Fox, GM, Samsung
  • Elissa Dwyer, Heart Research Institute
  • Nick Kirwan, FSC
  • Dr Bill Monday, PacificLife Re
  • Peter Tilocca, ANZ
  • Tina Beilby, Zurich
  • Tony O’Leary, G & T Risk Management
  • Malcolm Weir, Comminsure
  • Natalie Cameron, MLC
  • Loraine van Eeden, TAL
  • Paula Bourke, SCOR
  • Carol Smit, ALUCA & AIA
  • Carly van Den Akker – ALUCA & SwissRe
  • Mary Sinclair-Porter, Zurich
  • Amanda Stow, OnePath
  • Devi Uka, ALUCA Deputy Chair, TAL
  • Amanda McKernan, ALUCA CEO & Adjunct Faculty, UNSW
  • Jim Welsh, ALUCA Chair & AMP

 

Our Thanks

A huge thanks and congratulations to everyone who was nominated for an Award. The judges were very impressed by the high quality of the submissions. Everyone should all be incredibly proud of their achievements. It was very close in a number of the categories.

Many thanks to all of ALUCA’s sponsors too who helped to make these Awards possible. A shout out to our platinum sponsors who each  awarded one of the winners in a category.

A big thanks to our Awards committee who all worked tirelessly to ensure the night ran seamlessly and no envelope mishaps happened like at the Oscars!

Thanks too – to Dean Mico and Lynette Mico the son and widow of the late David Mico who presented the David Mico  Excellence in Life Insurance education award. This special award dedicated in memory and  honour of  David Mico’s contribution to the Life Insurance industry through his work with IFSA (now FSC), he successfully worked to maintain the balance between the freedom to underwrite applications and assess claims fairly and the needs of the community at large. This award acknowledges an individual from the life insurance industry who has excelled in their on-going professional development in Life Insurance via education

 

Emeritus Professor Ron McCallum, AO

The guest speaker for the night was Emeritus Professor Ron McCallum, AO who was such an incredibly inspiring man. Blind since birth he provided  first hand insights into blind technologies and innovations in the last century and demonstrated how this has  helped the visually impaired read and overcome some of the other challenges blind people face.

Visually impaired himself, his success as a lawyer, educator, and advocate for blind people is in large part due to technologies like tape recorders, voice synthesizing programs and computer scanning. Ron shared his very personal tale about his life, his challenges and achievements.
He was appointed to a full professorship at the University of Sydney making him the first totally blind person to be appointed to a full professorship at any Australian or New Zealand university. He has served as chair or member of various federal and state inquiries including the 2012 inquiry into the Fair Work Act 2009 (Cth).  All of the audience were incredibly touched by Ron’s story and his quest to champion the rights of the disabled.

 

MC, Sophie Scott

The MC for the Awards night was ABC Medical reporter Sophie Scott who did an excellent job interviewing all of the award winners and keeping the event on time.

There were also many learning’s for next year – one being that Underwriters are a modest group of professionals!  On behalf of ALUCA thank you for joining us for an evening where we were able to truly celebrate and acknowledge all of the wonderful talent in the Life Insurance industry and the achievements each and everyone has made. Everyone should feel incredibly proud of the enormous and positive difference we make to the communities we all serve.

 

ALUCA Life Insurance Excellence Awards Night 2019 – MELBOURNE

On that note stay tuned for ALUCA’s 2019 Life Insurance Excellence Awards night to be held in Melbourne. Nominations for all awards will open in November 2018.

 

ALUCA Life Insurance Excellence Awards Finalists & Winners, 2018

The award finalists and winners for each category are listed below with some of the comments we shared at the awards night as to why the winners were selected.

 

Individual Awards

 

1 ALUCA Life Insurance Leadership Excellence Award

This award acknowledges an individual life insurance leader who has demonstrated excellence above BAU by driving successful Life insurance strategies with strong customer outcomes.

 

Finalists & Winner

  1. Chris Austin, AMP Limited
  2. Amanda Ide, MLC Life Insurance
  3. Peter Tilocca, Onepath
  4. Tina Beilby, Zurich Financial Services      WINNER

 

Judges comments

The judges felt all finalists were ” very worthy recipients’  with a lot of discussion around each of the finalists and their tangible achievements  with a specific focus on leading teams to greater customer outcomes and their contribution to the industry. The winning nomination from Tina Beilby’s team for Tina was felt to have achieved stronger customer outcomes  with very clear tangible outcomes of her achievements and exceptionally strong testimonials both within and outside her organisation.

Prize selected by winner – Complimentary place to ALUCA biennnial conference in Hobart

 

2 ALUCA Life Insurance Claims Excellence Award

This award recognises an individual life insurance claims professional who has demonstrated excellence above BAU via their achievement of key claims business and customer outcomes.

 

Finalists & Winner

  1. Maieve Annersley, AMP Limited
  2. Ryan Gailey, BT Financial Group
  3. Matthew Austin, CommInsure WINNER

 

Judges comments

The judges commented that all finalists did demonstrate excellence in this category, However, the winner – Matthew Austin, set himself apart with demonstrably excellent customer outcomes and knowledge sharing, strongly attested to by colleagues, peers and customers alike.

Prize selected by winner – Complimentary place to ALUCA biennnial conference in Hobart

 

3 ALUCA Life Insurance Underwriting Excellence Award

This award recognises an individual life insurance underwriter who has demonstrated excellence via their achievement of innovative underwriting business/customer outcomes over and above BAU.

 

Finalists & Winner

  1. Roxanne Chapman, Zurich
  2. Stephen Connolly, Zurich WINNER
  3. Sarah Cosier, Zurich
  4. Simon Parry, Zurich

 

Judges comments

The winner, Stephen Connolly, was felt to be a great all-rounder who went above and beyond expectations of the role with a very sensitive and topical subject that will help underwriters in the daily delivery of underwriting decisions for customers with great use of FAQs to ensure consistency in the message being given to customers.

Prize selected by winner – 6 month coaching package

 

4 ALUCA Life Insurance Rehabilitation Excellence Award

This award acknowledges an individual life insurance rehabilitation professional who has demonstrated excellence via their achievement of innovative rehabilitation business and customer outcomes over and above BAU.

 

Finalists & Winner

  1. Karen Robertson, AIA
  2. Alexandra Russo, AMP
  3. Rebecca McMurray, Work Rehab WINNER

 

Judges comments

All finalists had achieved some great outcomes but the judges felt the winning submission for Rebecca McMurray, also provided tangible evidence of  doing more outside of their organisation, not just within. Rebecca also demonstrated innovation in the industry with strong regional  community involvement  with strong proof and tangible evidence of her achievements.

  Prize selected by winner – 6 month coaching package

 

5  ALUCA Excellence in Life Insurance Rising Star of the Year Award

This award recognises an individual who has worked in life insurance for under three years who has demonstrated excellence in a claims, underwriting or rehabilitation role above BAU.

 

Finalists & Winner

  1. Donna McEwan, AMP
  2. Amlan Sharma, AMP
  3. Katie Hartley, CommInsure WINNER

 

Judges comments

The judges shared that each of the finalists had great submissions, going above and beyond their day to day role with clear outcomes.

The winners submission for Katie Hartley, clearly articulated the accomplishments that she had achieved with some really strong customer outcomes – the judges also noted that the winner included  testimonials from different external companies not just internal ones.

Prize selected by winner – 6 month coaching package

 

6  ALUCA David Mico Excellence in Life Insurance Education Award

A special award for an individual who has excelled in their on-going professional development in Life Insurance via education – open to all Life Industry professionals.

 

Finalists & Winner

  1. Carola Moore, AMP WINNER
  2. Christine Gan, CommInsure
  3. Daniel Devine, TAL
  4. Katherine Matherson, Zurich

 

Judges comments

Very strong and varied finalists who were all to be highly commended. Judges were impressed by the finalists ongoing commitment to their professional development.

The winning nomination from Carola Moore demonstrated her broad range of life insurance education showing how she had used her life insurance knowledge to bring a vast range of varied topics into the business to have a direct and improved impact on the customer experience.

Cash prize of $1,500

 

 

TEAM AWARDS

All winning teams to receive a bespoke speaker event especially for their teams.

 

7 ALUCA Life Insurance Excellence Claims Team of The Year Award

This award recognises a Claims team who have shown leadership and innovation as a team in the life insurance claims area that enhances customer outcomes above BAU.

 

Finalists & WINNER

  1. Fifita Ngaue – CommInsure Claims Team
  2. Alice Chiesa – MLC Life Claims Team WINING TEAM
  3. Jackie Cumming – Qinsure Claims team

 

Judges comments

The judges said that they felt the winning team  – MLC Life Claims team – addressed many parts of the claims process and achieved highly desirable customer outcomes. Holistically it was a compelling journey that they have been on and they had done something different for their customers – achieving great and tangible outcomes with proof and evidence of this.

 

8 ALUCA Life Insurance Excellence Underwriting Team of The Year Award

This award acknowledges an Underwriting team who have shown leadership and innovation as a team in the life insurance underwriting area that enhances customer outcomes above BAU.

 

Finalists & Winner

  1. Lisa New – Asteron Life team WINNING TEAM
  2. Gail Jones – CommInsure team
  3. Helen Molloy – TAL team
  4. Matthew Apps- Zurich team

 

Judges comments

This was another very close decision.  The winning  team – Asteron life – achieved something new and fresh. The finished project not only facilitated customer benefits such as much improved cycle times but also incorporates excellent management information data enabling ongoing improvements. Their team innovation cuts across the whole business. They also demonstrated clear improvements that had a positive direct impact on the customer experience by bringing the underwriter into each customer’s front room.  Although these changes first started in 2015 – they were a leader in change and the transformational part was delivered in 2017.

 

 9  ALUCA Life Insurance Excellence Team of The Year Award: Customer Service

This team award recognises teams working in life insurance who have demonstrated an outstanding commitment to innovative customer care to provide great customer outcomes above BAU.

 

Finalists & Winner

  1. Neil Borthwick – BT Financial team – Claims
  2. Ciaran Curley – CommInsure Claims team
  3. Lucy Hartley – EM Life
  4. Rommel Luzaraz – TAL Direct Claims team WINNING TEAM

 

Judges comments

The nature of the award is based on customer feedback as well as what is being done to address the feedback. Judges loved the community effort in the winning submission from TAL’s direct claims team and the extra step that this team go to.  They were able to show how they took their customer service to the next level with lots of support and proof of this in addition to a great video clip.

 

10  ALUCA Life Insurance Excellence Team of The Year Award – Innovation

This award honours a life insurance team working in the sector who have shown excellence in life insurance through innovative processes/products/services/data/ technology etc.

 

Finalists & Winner

  1. Neil Borthwick – BT Financial Claims team WINNING TEAM
  2. Amity McCarthy- Comminsure Digital Claims team
  3. Georgina Lamb – IPAR team
  4. Peter Tilocca- OnePath Underwriting team

 

Judges comments

This category brought much discussion amongst the judges as two finalists were very, very close but the winning submission from the BT Financial Claims team,  demonstrated their innovation excellence via their customer leading innovation delivering strong customer outcomes.

The  NSW Chief Data Scientist, Dr Ian Opperman who was one of the judges for this category wanted to make mention of the other very strong entry from the  IPAR team who were very impressive – with their depth of innovation which was to be commended.

ALUCA CPLI Amnesty Extention

The good news is that due to popular demand for ALUCA ‘s Professional Accreditation and CPD program: Certified Professional Life Insurance (CPLI) ALUCA’s Board have agreed to extend the amnesty for all ALUCA members until the end of September this year to allow people plenty of time to find their certificates and other educational qualifications.

ALUCA’s Certified Professional Life Insurance(CPLI) accreditation program which clearly demonstrates the ongoing professional development required of Life Insurance underwriters, claims and rehabilitation professionals to ensure their compliance with the overarching ALUCA competency framework and demonstrates their high standards of professional development.

CPLI Accreditation Process

At the end of July 2018 ALUCA’s cross industry education panel will meet once again to work through the backlog of pending CPLI applications. The Education panel meet quarterly to work through all pending CPLI applications.

We still have a number of outstanding applications whilst we wait for members to locate their missing educational certificates or verify the time they have spent in Life Insurance in an underwriting, claims or rehabilitation role. If you have any questions or need help with anything please don’t hesitate to call us on 02  9431 8654 or send a note via e: secretariatofficer@aluca.com

For all ALUCA accredited members please remember that you must achieve a minimum of 35 CPD points each calendar year which will be pro-rated for members who become accredited during the course of the year. You can find all of the details via ALUCA’s website and you can update your points in the self service CPD part of the Members Centre so you can track your points.

Update from America – Hank George

Greetings from Milwaukee, where the last vestiges of our protracted winter (i.e., snow on the ground) finally disappeared in April.

If I digressed to characterize the wretchedness of January and February here on Wisconsin’s famed frozen tundra, you would likely judge me so disposed to hyperbole that you would not stop reading this report!

This update is based largely upon findings from our 2018 New Business Critical Issues Survey. It was conducted over a span of six months stating in October 2017. Chief underwriters from 93 insurers offering individually underwritten life insurance participated in this survey.

This project was funded by cosponsorship contributions from reinsurers and underwriting-related service providers. Nearly all reinsurers doing business in our individual life market stepped up to assist. Part of their motivation is that distribution of the copyrighted survey report is limited solely to cosponsors and survey takers.

This survey addressed a broad range of subjects. The one garnering the greatest attention is what we call “accelerated underwriting”.

 

Accelerated Underwriting (AU)

AU is defined as offering life insurance cover up to some maximum age and sum insured without mandatory paramedicals and laboratory tests despite charging same premium rates as those for fully underwritten business.

Based on this definition, 65% of companies offer accelerated underwriting for at least one individual life product. In a substantial portion of companies, AU is permitted on most or all life plans.

Only one insurer reported rejecting AU outright. Most of the rest were sorting out the matter at the time they took the survey. The “good money” (in race track parlance!) says that nearly all will follow suit and roll out AU in the near future.

Why?

Because those not offering AU will see virtually all of the best new business go to competitors. This will lead to substantial attrition in the ranks of their (increasingly disgruntled) advisors. In today’s tight market, these two outcomes carry a dismal corporate prognosis.

The three most significant drivers of AU development were, in this order, actuaries, chief underwriters and reinsurers. Sales/marketing executives and CMOs had notably lesser roles and barely 10% cited “outside consultants” as significant assets.

Such is the nature of the barren American marketplace for underwriting-related consultancy services nowadays!

Many larger insurers with robust retention limits and/or favorable reinsurance arrangements offer $1 million or more of cover on an accelerated basis. Some go as high as $2.5 million.

When asked what they consider the maximum age at which AU is practical based on the number of applicants likely to qualify, 42% said age 60 and 32% favored age 55.

Nevertheless, many of these same companies offer to underwrite on an accelerated basis through age 65.

What does it take to qualify for accelerated underwriting?

Most insurers require a handful of rapid-access evidence, typically consisting of:

  • An application, with the risk history taken by teleinterview or via online questioning
  • An MIB report
  • A motor vehicle record (MVR) noting any violations within a period of years
  • A pharmacy record listing all prescription medication taken over some interval, currently Rx records can be accessed on 7775%-80% of insurance seekers.
  • An electronic data report addressing a potpourri of financial details, court records, etc. et al

If the proposed insured qualifies for preferred risk cover based on the foregoing evidence, approval is “accelerated” by virtue of no need for a paramedical or lab tests.

The Achilles heel of AU is that insurers must rely on what the proposed insured tells them regarding such essentials as height/weight, tobacco use, HIV status and so on.

A recent paper in a major actuarial publication has fueled concern for rather generous understatement of weight and this is reflected in the survey as the domain conferring the greatest worry over potential material misrepresentation.

A majority of survey takers (61%) believe that nondisclosure of tobacco use – likely the most impactful of these issues – will exert a “moderate” adverse impact AU mortality.

Some of us old gits reckon the magnitude of “smoker’s amnesia” may be a tad more impactful! Time will tell.

 

Direct-to-Consumer (DTC) Testing

Americans have unfettered access to relatively-inexpensive DTC tests ranging from coronary artery calcium (CAC) scans and abdominal aortic aneurysm ultrasound to laboratory profiles so comprehensive they contain every routine blood test we use in underwriting except NT-proBNP.

The US Food and Drug Administration (FDA) has approved the 10-component 23andMe genetic test profile for DTC testing and also created a fast track to accommodate sanctioning of other genetic profiles for this indication. DTC BRCA1-2 breast cancer gene mutation screening is also available at relatively low cost.

To make matters worse, a consensus agreement affecting the substantial majority of US states prohibits asking applicants whether they have had any medical tests not ordered by healthcare professionals (which, of course, defines DTC tests!).

When asked about the extent of their concern for nondisclosure regarding DTC testing, 44% said it was “moderate” and 36% owned up to just “minimal” concern.

Several survey takers commented that their views could change as more DTC tests (especially of a genetic persuasion) enter the marketplace.

Just as with the potential for tobacco nondisclosure hijinks, one wonders if the dominant viewpoint here is at least a bit naïve.

 

Marijuana Use

In the last few years there has been a gradual shift in how American insurers regard occasional recreational cannabis use by adults.

Instead of charging them the same base premium designated for cigarette smokers (indeed, most if not all tobacco devotees), a courageous few were countenancing non-tobacco rates for selected pot smokers, largely on a case-by-case basis.

In the new survey, 59% said “yes” when asked if they “permit adults who occasional smoke marijuana…to be eligible for ‘non-tobacco user’ rates on some basis.”

Only 12% had considered and then rejected this practice whereas 9% were weighing the merits of joining the majority. The rest had not as yet given thought to the question.

Our July CE course on Marijuana and Underwriting is based on 243 studies and review papers addressing every aspect of cannabis use and what is known of its links to various ailments, adverse motor vehicle consequences and, most importantly, mortality.

Our research shows that the weight of evidence strongly favors liberalization of underwriting of recreational marijuana at least to the extent that the majority of carriers are presently accommodating.

The matter of medicinal pot use is more problematic if only because many of the ostensible indications for cannabis therapy substantially impact mortality risk. In addition, there is markedly greater exposure when marijuana is smoked in a therapeutic context as compared to the doses absorbed by most recreational users.

 

Opioid Use  

Roughly one-third (1/3rd) of US companies now screen for opioid use on an age/amount and/or elective (underwriter discretion) basis. An equal share of carriers are considering this practice and no doubt most will chose to proceed.

Needless to say, this is being propelled by concern for the so-called “opioid epidemic”. Over half of respondents who felt they could speak to their life claims experience reported at least one recent opioid-related death claim.

Heroin-related deaths were rarely an issue for insurers until the last few years when they became as prevalent in the suburbs as inter city urban areas. Most of the larger policies are sold to persons living in the ‘burbs, as they say.

Insurance opioid testing protocols cover all major forms except tramadol and tapentadol. These two are distinct from other opioids in their mode of action but both can be abused. If the highly sensitive screening tests are positive, confirmatory tests are done before the insurer is advised of a positive result.

 

Underwriting Calculators

When I made what was likely my last-ever Association of Home Office Underwriters (AHOU) presentation at our 2018 conference, I went off on a wee tirade denouncing the use of so-called calculators to “aid underwriters” in assessing insurability of cancer risks.

My views are less than warmly received by some reinsurers given how widely calculators have metastasized within underwriting guidelines.

In the survey, we asked several questions about respondents’ perceptions regarding these confounded devices.

The substantial majority concurred that calculators increase the likelihood of avoidable errors by underwriters and also promote the deeply flawed perception that cancer cases can be routinely engine/machine underwritten sans human involvement.

Touché!

 

“Selfies”

An underwriting services-wannabe came upon the scene recently, pitching the proposition that one could distinguish biological from chronological age based on facial features on a “selfie”.

At this writing, we are aware of just one insurer using this resource.

When we asked if survey completers felt that selfies were “a viable source of accurate information for underwriting purposes,” two of 93 respondents replied in the affirmative.

Based on our research (which we wager is the most extensive yet undertaken), we congratulate the 91 chief underwriters who look askance of this proposition.

Meanwhile, there is at least one new service provider on the cusp of introducing epigenetic testing. This is a far more intriguing proposition than conventional genomic testing because it does not involve germline (inherited) genetic changes. Epigenetic changes arise over the course of one’s lifetime.

Our research to date suggests that epigenetic testing may indeed confer substantial value as a mortality marker. Certainly biological vs. chronological age distinctions would be far more credible on this basis as compared to “selfies”.

This said, there are many issues to be resolved (several of which could rule out epigenetic testing based on cost and other considerations). The jury, if you will, is still out.

 

Accelerometers

While just two companies currently offer lower premium rates and/or other perks to applicants willing to wear accelerometers (FitBit, et al), 18% are studying the proposition and just 4% have nixed the notion.

We appreciate the initial appeal of this concept.

What its promoters may not appreciate is the weight of evidence in published studies showing substantial attrition in device deployment that evolves over some interval of time…and regardless of incentives to continue wearing such devices.

As a sales gimmick, this gambit may make sense.

As a legitimate approach to improving mortality outcomes, a healthy skepticism must be maintained until such time as hard evidence – not merely wishful projections – confirms a sufficient and sustained payoff.

 

Fair vs. Unfair Discrimination

Respondents were shown seven potential risk assessment criteria and asked if they considered them to constitute fair vs. unfair discrimination as potential arbiters of insurability.

The strongest consensus was with religious affiliation, where 94% considered it to be an unfair form of discrimination. This was followed by race (90%), ethnicity (89%) and sexual orientation (86%).

Only 74% held that marital status was flawed risk assessment criterion and just 66% took this position regarding the use of personal purchase records in underwriting.

The last criterion scrutinized was zip code (our term for postal zone).

It is disconcerting that 1 in 4 respondents did not regard this as a grossly inappropriate underwriting consideration.

In most large America cities there are one or more postal zones wherein a high proportion of residents come from a single racial or ethnic group, making this a virtual poster child for unfair discrimination.

 

Underwriting Engines

Over half (55%) of 93 US life insurers currently have engines that facilitate “straight-through processing” of new applications, making at least some less-complex underwriting decisions without human intervention.

Half of these carriers created their engine internally, 30% acquired it from a reinsurer and the remainder from an independent software firm.

Only 5 insurers either stopped using or decided against deploying an engine. Most of the others were actively exploring this proposition.

 

Working Remotely

Approximately two-thirds (2/3rd) of US life insurers allow at least some of their underwriters to work remotely (that is, from home) on some basis.

In our currently prevailing “sellers’ market” for underwriting talent, those who do not accommodate working remotely are at a formidable disadvantage when seeking to hire veteran underwriters.

A slight majority (55%) of chief underwriters tell us they do not get significantly greater productivity from remote (vs. in-office). If you had asked this question 10 years ago, 80% would have said that underwriters working remotely were anywhere from 10% to 25% more productive.

Why did this changed?

In the early years when carriers were still experimenting with this practice, those who worked from home feared that they might be forced to forfeit this option. Therefore they worked harder and were thus conspicuously more productive than their peers laboring in the confines at head office.

Now that roughly half of all U.S. underwriters work from home there is no longer a perceived risk of losing this beloved option and thus little incentive to sustain higher levels of productivity. Indeed, there are substantial advantages for insurers even in the absence of heightened remote underwriter case output.

Some 34% of survey takers that embrace working remotely are presently amenable to underwriters with less than three years’ experience working remotely. A decade ago most required at least five years’ seasoning and above average performance ratings as eligibility criteria for working from home.

The success of work-from-home underwriting is underscored by the fact that 99% acknowledged being “pleased” with the impact of this practice.

 

Artificial Intelligence (AI)

Asked to opine on the future impact of AI, the majority concurs that human underwriters will continue to have the dominant role, with AI assisting rather than replacing most of their staff.

They also largely agree that underwriters will need to become more fluent with predictive analytics and gear up for greater contact with both advisors and their clients.

 

Other Topics

The majority of survey completers cling to the flawed perception that blood profiles must be done on a fasting basis.

This longstanding notion – now debunked by leading experts in clinical chemistry – has encumbering the paramedical process… because most advisors insist on scheduling their clients between 6 and 9 am!

Only 24% of insurers currently include exceptional parental longevity in their preferred risk guidelines. This is usually defined as both parents living anywhere from 80 to 90 years.

All of the evidence we have reviewed underscores the validity of this practice.

A combination of two antiretroviral drugs, marketed here as Truvada, is now widely used by individuals at heightened risk for acquiring HIV infection.

When asked how they handle these cases, 60% said they issue without any loading, 13% rate up the case and 27% decline coverage. It would be eye-opening to hear the arguments for these starkly differing approaches to this insurability issue. We shall be discussing this shortly at my life underwriting study group meetings.

Over the last half decade, ECG screening has scaled back dramatically and for the most part it has been replaced with NT-proBNP.

Just six survey takers have eliminated all ECG screening, whereas nearly half have dramatically reduced their use of the obsolete, client-unfriendly option.

We have challenged anyone to defend the use of ECGs in lieu of NT-proBNP screening. Predictably, no one has clamored for the opportunity to lose a debate on the matter!

Outsourcing of case underwriting remains in its infancy. The majority of insurers tell us they have not yet considered this option and are unlikely to do so. Of those that countenance this practice, just 7% outsource risk assessments to a notable extent.

The use of outsourced summarization of medical records is more widespread, with one-third (1/3rd) engaged in this practice.

It appears that the vast majority of these summaries are outsourced to India and, to a lesser extent, other Asian countries. It is apparently infeasible to get this done domestically on a cost-effective basis, and pricing competition among providers is substantial.

If you were weighing the pros and cons of outsourcing review of physicians’ records, would you focus more on the quality of the summaries than their unit cost?

How reckless is it to sublet one of the most important aspects of risk assessment on the basis of which provider will do it the cheapest!

Just 14% of survey respondents own up to using social media content in underwriting, with an additional 7.5% considering this option. The substantial majority has not considered this option as yet.

Let us end on a cheerful note:

Over 70% were “very satisfied” with support from their reinsurer. Just six were “somewhat” or “very” dissatisfied.

This concludes our review of the more interesting goings-on across the Pacific. Hopefully you found some of it interesting.

I would be remiss in not adding that most Americans disgruntled with our current president are clear-headed enough to back off from advocating his impeachment and removal from office.

For one reason…

His successor would be Vice President Mike Pence.

Anyone less than enamored of President Trump would be well served to Google Mike Pence (after a couple of stiff drinks!).

Best wishes for the continued success of ALUCA!

I welcome your questions and comments. You may reach me at hank@hankgeorge.com.

 

Hank George FALU

Hank George, FALU, is a longtime ALUCA member. He is self-employed as an educator and consultant, based out of his office in Milwaukee, Wisconsin. His websites are www.hankgeorgeinc.com and www.insureintell.com. Hank may be reached at hank@hankgeorge.com.

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