Advisors continue to be underwhelmed by underwriting

by Will Ashworth19 Oct 2015
LHP asked advisors about insurance carriers in the latest print edition of the magazine and out in front leading the pack was a concern about underwriting. While not all the feedback was negative it highlights the work insurers still need to do if they want to keep advisors happy.

Asked about nine different subject areas as diverse as reputation to commission structure to underwriting responsiveness, advisors gave the latter subject the worst rating of the bunch.

“To say it’s an exact science might be the understatement of the year. Not only is underwriting unresponsive and slow, and full of decisions, declines and exclusions that are often baffling to advisors, but communication between carriers and advisors leaves a lot to be desired,” found LHP’s first annual Advisors on Carriers survey. “It should come as no surprise that underwriting received the lowest average score from advisors, clocking in at 3.49.”

Looking ahead insurance advisors see a myriad of issues facing the industry in the next 6-12 months. At the top of the list is underwriting with 39% of advisors suggesting it will be the most important issue affecting the advisor/carrier relationship in 2016.

When it comes to commenting on underwriting by the major carriers advisors weren’t shy about expressing their feelings on the matter.

“Underwriting time and accuracy,” is a problem a respondent told LHP. “Sometimes [underwriting] reads too much into a case, when there is nothing to read into. Communicate with the field underwriter more.”

“Understand what goes on in the front line so that they can better help the business process occur (rather than requiring an initial from the client on a piece of paper versus a pdf - i.e. use electronic signatures),” said another survey respondent.

Again a top answer, 20% of advisors said they’d like to see insurance carriers improve their underwriting in the next 6-12 months, not a surprise given advisor comments like those above.

However, all is not lost.

Advisors gave Transamerica, Blue Cross and Empire Life very respectable overall scores of 4.19, 3.92 and 3.90 out of 5, respectively.

Positive comments from advisors weren’t nearly as frequent but one respondent’s comment stands out as a beacon of hope for the underwriting process.

“Generally underwriting is quick. Communication with advisor is very good. Online application is easy to use and very effective, saves a lot of time.”


  • by Steve M. Szenasi 2015-10-19 3:45:41 PM

    As a former Life & Health Underwriter and now an adviser at the retail level, I have a sense of the route cause of the adviser's frustration with many underwriting shops. It begins with the culture of an insurer. How the insurer sees the role of the advisor and the underwriting function. That begins with the insurer CEO. If the CEO is an actuary, lawyer, banker, or an accountant, it may well be that an adviser is a necessary evil, not an asset. The underwriting function fall on the liability side of the balance sheet and not the asset side.

    The next hurdle is that advisers don't understand enough the underwriting process and what the underwriter is looking for. New business systems are set up with a multiplicity of narrow scope functions, much like an automated bottling plant. Each function along the line is self contained. This makes it easier to train new business staff. The downside, is non of the component staff has a feel for the impact of their actions on fellow workers or the adviser.

    Advisers need to know, understand and deal with the difference between clinical medicine and insurance medicine. If you know the client health history and a general understanding of how underwriters may deal with that, advisers can better manage client expectations and target sales presentations know there may be an issue with NB issue.
    A few years back I did a CE credit presentation on how a 24 hour delay in ordering or processing some element of the new business process can drag a 5 working day turn around into a 30-35 calendar day response time. Always remembering that commission expectations are measured by the calendar not the business days.