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[Underwriting] Education in the Evolving World of Risk Assessment

Thu, 22 Sep 2016 21:07:16 +0000 / by Miguel Ceron

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Continuous education is something we champion at LOGiQ3, not only as one of the 11 Maxims that drive the way we do business, but as a way to ensure our team of experts remain just that – experts. This is especially important for Life Underwriters as modern medicine is constantly evolving and new information about medical impairments is more readily available. The near constant stream of new information and advancements in medicine have an effect on the mortality rates of a population, making this knowledge a must-have in order for Underwriters to effectively assess a client’s risk profile.

There are, of course, numerous factors that contribute to an insured’s overall risk classification. Some are uncontrollable (family history, genetic predisposition, etc.) and others are controllable external factors (diet, lifestyle, etc.) – even Geographic Location can have an effect on the types of medical impairments that a life insured may be at risk for. Regardless, being aware of what your market is at risk for will be key to your success as an underwriter.

Understanding the European Market from the Underwriting Perspective

As we gear up for the upcoming ELHUA conference in Madrid, we conducted some research to help us better understand the market. I set out to answer two questions:

  1. What risk factors, health impairments and behaviours should underwriters approaching this market be aware of?
  2. Is there anything we can apply from our knowledge on the North American market to the European region?  

What risk factors, health impairments and behaviours did I discover about the European market? 

One statistic that immediately stood out to me was around premature mortality: 30% of deaths in the European Region occur before the age of 65

With this in mind, I wanted to explore the prominent types of premature mortality factors in the European market.

A recent report from the World Health Organization noted that the European Region has the highest levels of alcohol consumption and tobacco use in the world and the second highest instance of obesity among adults. These are definitly risk factors that underwriters in this region have on their radar. 

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While it doesn’t take an expert to tell you that vast amounts of alcohol and tobacco are detrimental to the mortality of an insured – there are comorbidity factors to consider such as the effects of alcohol on hypertension, or kidney function.

Other factors to consider?

There are also socioeconomic factors to consider which can vary by geographic location. A study by the European Observatory on Health Systems & Policies revealed some interesting correlations between instances of certain diseases and socioeconomic factors such as education.

Another statistic that jumped out for me was that 80% of deaths in the European region are from non-communicable diseases including:

  • Chronic obstructive pulmonary disease
  • Cardiovascular disease
  • Cancer

Here’s what you should know about each:

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During my research process I also learned about communicable diseases and that 40% of all mortality in the European region from communicable diseases is from tuberculosis. I’ve included other key information about communicable diseases that I discovered here:

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What does this all mean for you?

Well, at the end of the day whether you underwriting in the European region or any other market, there are three questions to ask:

  • Is your team prepared to underwrite prominent diseases in your region?
  • Does your team have the resources to correctly assess these risks?
  • As an underwriter, do you know how to identify these heath impairments?

If any of your answers are leaning towards ‘no’, not to worry!

This is where our experience in the North American market comes into play. Check it out in Part II of this blog, coming soon!

European underwriting market

 

 

 

Topics: Underwriting

Miguel Ceron

Written by Miguel Ceron

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