FAST IDI Underwriting
Speed to issue is a closely watched statistic at many of the individual disability insurance carriers. The days of underwriting at a snails pace are over. Simplified applications, imaging, increased levels of coverage without medical testing requirements and changes to the financial documentation are just some of the reasons that IDI underwriting response is better than ever.
While the carriers are doing a great job positively impacting the process, an application, and therefore the underwriting process, begins with the financial professional.
Let’s examine the FAST protocol.
It’s a fact, the definition of field underwriting has changed. In the ‘good ol days’, insurance carriers depended on the eyes and ears of the agent to help assess the potential client as a risk worth taking. Those days are pretty much gone. However, that doesn’t mean field underwriting is dead, it has just taken a new direction.
Now, the producer must assess the risk in advance to determine the appropriate carrier to recommend to the client. This can be accomplished by the use of a variety of tools and in partnership with a variety of organizations. In the end, the best result is a proposal turning into an application and then into a policy; all without variation from the expected.
With the advent of the various forms of simplified applications in use today, it would seem application completion is no longer important. However, you must view the entire process as the application. This includes the financial documentation and required medical testing. Proper attention to the entire application has a big payoff.
In fact, many of our brokers are using a one touch application process. With proper planning, the client arrives at the producers office and completes all of the requirements for the packet. The paper application, medical testing, financial documentation and telephone interview; all completed in one meeting!
Strategy for Placement
The successful producer plans the delivery process before the application is taken. You must manage client expectations and deliver as promised. To do so means a high placement ratio and recommendations for additional business. In our firm, we have an 87% placement ratio (much higher than the industry average) and this is directly attributed to process strategy management.
What is the strategy for placement? It starts with informing the client of the process, expected timeframes for completion and agreeing up front what the delivery process will look like. It means updating the client regularly and keeping them engaged.
It also means collecting money with the application! It is important to employ the conditional coverage a carrier will provide based on the terms of the conditional receipt. Don’t overlook this step! It may become the most important part of the process should your client suffer a sudden change in health.
Timeliness of Process
The carriers are helping; working hard to shave days off the underwriting process. But there are still too many delays which occur due to the client and producer not addressing their responsibilities in a timely manner. The application paperwork along with the financial documentation should be submitted as quickly as possible after it has been taken. Medical and other requirements need to be tackled expeditiously. A clear expectation of what must happen to speed the process will pay dividends.
Planning and process management is the key for the FAST process to be successful. Work closely with your internal support staff and your external vendors to make sure you are adhering to the FAST standards and watch your business grow!