If you are in the underwriting industry, tele-underwriting is something you have likely heard of. While it has been around for some time, there is a seemingly growing need for it. Perhaps, with the insurance industry experiencing changes, professionals are thinking more about catering to a generation that is digitally dependent and is accustomed to on demand services and minimal customer barriers. Both of which tele-underwriting cater to, to some extent.
The increasing interest in tele-underwriting has been a key topic of discussion at industry conferences such as the 2016 AHOU (Association of Home Office Underwriters conference) which our life underwriting experts had the opportunity to be a part of. While tele-underwriting is gaining momentum, there is still a lot to learn. To help bridge the knowledge gap on the world of tele-underwriting I put together a list of four must-read articles for you to get a better understanding of it.
This article includes insights from a worldwide industry survey, that was conducted to gauge the extent of tele-underwriting’s uptake. It’s a great intro to the topic and explains the difference between two terms that are commonly confused in this realm: tele-underwriting vs. tele-interviewing.
Tele-underwriting is the overall process used to make an underwriting decision based on the tele-interview.
Tele-interviewing is a recorded telephone interview to gather risk related information directly from the applicant.
Not only is tele-underwriting of growing interest in North America, it appears to be a global interest as well. This article from an Australian publication proposes an answer to the question: “Why the sudden need for this?” It explores how tele-underwriting can improve efficiencies in the industry. One stat that stood out to me was that on average, it can take advisors about 10 hours to complete an application for a client. However with tele-underwriting, they estimate that anywhere from two to four hours worth of work can be saved.
One of the questions I asked myself about tele-underwriting is how does it differ from traditional underwriting. What kinds of questions are being asked to ensure underwriters have all information necessary to make an informed decision? While this article explores several topics on tele-underwriting, one section of notable interest was the ‘healthy adherer effect’:
The “healthy adherer effect” suggests that the presence of one undesirable health habit means that others are highly likely as well. Questions that indicate health habits of individuals are seen as a viable option for tele-underwriting. While these kinds of questions can also be answered on forms, a tele-underwriting environment provides the opportunity to ask about and expand on habits that specifically come up in the conversation. For example:
- Do you wear your seat belt when driving?
- Do you have an annual mammogram?
- Get more examples here
This article includes insights from another industry survey that answers key questions on the topic of tele-underwriting. One of the findings that caught my attention was a significant reduction of Attending Physician Statements (APS) order rates. Yet despite this, it is still thought that the tele-underwriting process obtains superior medical information. The article offers 6 major reasons why this might stand true:
- Applicants are more forthcoming with their personal medical history when on the phone with a trained medical professional than they are with the producer.
- Superior medical information is provided when the applicant has a clear understanding of what the medical questions will be ahead-of-time, and has ample time to prepare.
- Interviewing scripts have matured over time into sophisticated data-collection tools.
- Read the rest here
You can stay up to date with the latest industry news by following our [Insurance News Series] on Twitter with the hashtag #L3InsuranceNews.