Today’s article is not for the insurance product manufacturers and their in-house underwriting teams, but is instead for the average financial adviser specialising in risk insurance.
Many advisers think of underwriting as being the product manufacturers role, but in reality – and certainly for the most successful advisers – the underwriting process starts in the adviser’s office.
We’ve all been through the drama when the insurance underwriter comes back with a list of hard questions or unfavourable conditions on a new policy. Then we have to make the dreaded call to the client, with most of us blaming the insurance product manufacturer instead of doing the right thing and taking the responsibility ourselves.
The underwriting process should start at the first meeting with your client, not at the advanced stages when it could be too late to salvage.
Visually you should be able to see whether or not there are going to be issues with BMI. How you approach the subject of the client’s weight can be tricky, but most people with a well above average BMI will know that it could have some effect on their application or personal insurance.
Other less visual factors should come up during your conversations with the client. Do they participate in any hazardous activities? Do they have any health issues? Are there any financial matters that the insurance product manufacturer will have a problem with?
You should not wait for the insurance company to pick these items up in the completed application. Instead, they should be raised as soon as they become evident, which allows you to preposition the client for any negative result which may come back from the insurer.
Furthermore, you should obtain us much information as possible from the client to assist the insurer with their underwriting process. On face value a particular answer on an application form may look very bad for the client, but if you can investigate this with the client and provide the mitigating information to the insurer up front, you may find that the underwriting decision is much more favourable for you and your client.
The underwriting process is a long and complex one, but by taking some responsibility yourself and not leaving everything up to the insurance product manufacturer you will find that the outcomes are much better for all involved.
As a pleasant side effect, you will also find that the insurance manufacturers underwriting staff will have a lot more respect for you, which can only lead to even better outcomes for you and your clients.
