Accelerated Underwriting Is Here To Stay, But It Needs To Be Done Right

OXON HILL, Md. -- AgencyOne is requiring its agents to submit all life insurance policies at $1,000 or less of premium to accelerated underwriting.

It is part of a transition the industry must make to meet consumer needs, said Gonzalo Garcia, partner at AgencyOne, a life brokerage general agency based in Rockville, Md.

"I can’t afford to process a $1,000 or an $800 premium in our agency," Garcia said. "I just can’t do it."

Garcia was part of a panel this morning on accelerated underwriting at the 2017 LIMRA Annual Conference. The panel agreed that accelerated underwriting is here to stay, but it needs to be done right to protect the client.

In general, policies up to $1 million for clients ages 18 to 60 are eligible for accelerated underwriting. At John Hancock, about 35 to 40 percent of those policies are accepted, said Lisa Shepard, assistant vice president and assistant general counsel for the company.

Involving legal is an important key to crafting accelerated underwriting programs, she advised.

“We really are all working toward the same goals," she said. "We need to be involved early. ... That really gives us the opportunity to address contentious issues as they arise."

Discrimination is one of those issues. And even if something is legal, does that mean you should do it? For example, mining a potential customer's social media to determine their policy fitness.

"Think about your company’s values and whether it is in line with that," Shepard said.

Agent training is another piece of the accelerated underwriting puzzle, Garcia said.

"We spend a lot of time preparing our advisors for the guidelines," he said. “People are used to sitting in front of a client and asking them these questions. They’re afraid to give up that level of control."

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNjohnh.

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