Our thoughts

The previous article illustrates the need to tailor the ‘underwriting mix’ to the rest of the marketing mix in order to create both an appealing customer proposition (and traditionally an appealing producer/broker proposition too) and a profitable source of revenue for the carrier. In the past, generally one underwriting mix would do – products were sold via intermediaries and there was seen to be little need to vary product design or processes between agent and broker channels. Today, though, it’s a whole different ball game. Direct-to-consumer (DTC) offers are more common. The Internet has revolutionized communicating and transacting. There is…

In marketing (by which we mean ‘running businesses profitably’ and not advertising/promotion, account management or selling stuff) they talk of ‘the four Ps’: Product Price ‘Place’ (ie distribution channel) Promotion. Together these elements are known as the marketing mix, and they combine to form the basic proposition that is offered to customers; tailor the mix to your target audience and you have the right product at the right price, sold in the right way, backed up by advertising and other forms of promotion that create awareness and demand. For service industries – life insurance is a good example – three…

We were fortunate to attend two very good lectures on HIV/AIDS in 2013, one by Dr Daniel Zimmerman of Northwestern Mutual at the annual AHOU meeting, and the other, by Dr Rogelio López-Vélez, at the ICLAM meeting in Madrid. Both speakers described the HIV/AIDS spectrum and the impact of HAART (highly active antiretroviral treatment – now available in fixed-dose combinations as a single pill, which makes for much better patient compliance), ending up by discussing the potential for insurability. There is no doubt that modern treatment – for those for whom it is available – has transformed HIV/AIDS from a…

Received wisdom is that cholesterol is a significant risk factor for the development of atherosclerosis, and for coronary heart disease (CHD) in particular. Bowden and Sinatra, in their book The Great Cholesterol Myth1, explain how historically too much importance has been attached to cholesterol as a cardiovascular (CV) risk factor, how lipid-lowering trials have yielded results that have been at best inconclusive, that eating saturated fat actually lowers serum cholesterol, and how occlusive vascular disease arises as a result of endothelial inflammation, an excess of dietary glucose and one’s inadequate reaction to the stresses of life.   Their arguments are,…

When the applicant knows more than the underwriter there is always a heightened risk of antiselection. In the past people didn’t know much about their health and wellbeing, but their physician did, which is why the APS has been such a valuable underwriting tool, such a reliable source of medical information. For as long as it is available the APS should continue its role in the underwriter’s defensive armory, but increasingly it is no longer the sole source of historical medical information about the applicant. Thanks to technology, applicants are getting to know a lot more about themselves. Consider the…

Predictive analytics (also referred to as ‘predictive modelling’): is it the future? It is if you listen to firms that are taking a keen interest in, or even specialize in, ‘big data’. Firms like BioSignia, Deloitte, Towers Watson and Milliman are intent on getting the ear of carriers, and even reinsurers like RGA and Swiss Re are getting in on the act. According to Deloitte, there are 40 data vendors out there and around 100 databases to draw upon. Also, they have a database that includes every adult in the US, all derived from publicly available information. Sounds like powerful…

We were musing the other day about how to deal with smoking, pondering matters like: If an applicant says he or she smokes x cigarettes a day, can you believe that? How do you deal with cigar and pipe smoking? Should you ask about inhaling? How much does size of cigar count – for example cheroot or cigarillo versus fat Romeo y Julieta? What about ‘rolling your own’ (possibly a mainly British working class thing)? And what is the equivalent in loose tobacco (for pipes and ‘roll-ups’) of a pack of 20 cigarettes? Of course some brands of cigarette are…

Nowhere in the world is the underwriting process as sophisticated as it is in North America. Nowhere else are underwriting decisions based:   So frequently on laboratory analysis of blood, urine and oral fluid Routinely on modern assays such NT pro-BNP On MIB information – the MIB is unique, certainly as regards the level and detail of information On MVR information – these databases are unique On Rx databases – again unique So frequently on tele-interviews.   And nowhere else do vendors offer such a wide range of integrated services – tele-interviews, medicals and paramedicals, large-scale, rapid-turnaround lab testing, APS…

Auditing performance is a routine necessity of good business management. Where underwriting and claims functions are concerned, how good are quality and accuracy? Is basic philosophy applied in practice? Are procedures and processes being adhered to? Are outsource suppliers meeting the required standards? And internal staff too? But that is only half the picture. Performance auditing demonstrates quality to stakeholders in and associated with the business, and can highlight other issues, such as the need for improved processes, new training and adjustment of core philosophy. Technical audits Historically the classic ‘technical audit’ involves the review of a sample of say…

This year the New England Journal of Medicine published one of a series of articles marking its 200 year anniversary. Entitled ‘Two hundred Years of Cancer Research’, the article is a useful reminder of just how far the understanding and treatment of cancer have come, not just in 200 years but in recent years as well. In almost the first 100 years of the NEJM’s existence physicians could do little more than observe, measure and weigh tumours, but in 1863 Rudolf Virchow, with the help of a microscope, deduced the cellular origin of cancer. In 1889, Stephen Paget published his…