Better communication between advisors and underwriters urged

By Daniela Cambone | August 19 2004 08:16PM

The relationship between advisors and underwriters needs radical improvement. Eyes are now turning to insurance companies to open the gates and reinstate plain talking as a money saving tool.

When Ross Morton, a well-known reassurer, advisor and mentor for the life industry, recently asked a crowd composed of more than 100 underwriters how many would be interested in communicating with advisors and increasing contact with them, only a handful of underwriters from various insurers raised their hands. He was then speaking at the Canadian Association of Living Benefit Underwriters (CALBU) conference, held May in Toronto.

“It was the most upsetting thing,” says Mr. Morton. “When I asked that question ten years ago, ‘how many of you would like to go out and visit and talk to agents about common problems and common solutions,’ to a group of about the same number of underwriters in Toronto, every hand in the room went up. At this meeting only nine people raised their hands and they were the more experienced underwriters,” he explains.

So why are underwriters hesitant about communicating more with advisors? “It is almost a fear of being bullied,” hypothesizes Mr. Morton.

Tom Dando, president of CALBU and an underwriting consultant with Maritime Life, who attended Mr. Morton’s presentation, agrees that better communication is needed. “The more communication the underwriter and the agent have, the better,” he says.

However, he feels that underwriters do not shy away from speaking with advisors because of a lack of self-confidence but rather it is a question of their workload.

“A lot of companies restrict broker access to underwriters, because they have high workloads.” On the other hand, he says that insurers have to realize that speaking with advisors and discussing cases directly, actually saves time.

Mr. Morton’s advice is to better train underwriters to look outside of the textbook and look at the big picture. “I think we need to teach underwriters about conversation skills and communication skills,” he says. He adds, “We have to teach underwriters how to probe, how to investigate and to get at the real question so we give the real answer. And companies need to get the underwriters out there to meet the producers.”

Advisors very much want to meet underwriters, he stresses. Underwriters should fly across Canada, meet advisors and explain the reason of why they cannot insure major risks. “Right after 9/11, for example, they were not proactive,” he says. Brokers were told which claims were rejected only once the cases came in, and not before the fact.

He later adds that in many denied claims cases, underwriters usually point to the reinsurers as the reason. But Mr. Morton says that many times, the underwriter is using the reinsurer as an excuse.

Another problem arising due to the lack of advisor-underwriter communication is incomplete applications. Many times advisors leave the applications blank, which can be frustrating for the underwriter.

A solution for incomplete applications would be to have electronic ones, stresses Mr. Morton, especially since he feels there is a trend towards incomplete applications.

With the electronic application, a broker wouldn’t be able to go to the next page, if they have not answered all the questions. “That would solve lots of problems,” argues Mr. Morton.

From an advisor standpoint, David Benamron, director of living benefits for the managing general agency, Copoloff Insurance Agencies says that whether they want it or not it is in the advisor’s best interest to speak with the underwriters.

“Successful agents have a contact with at least one underwriter they talk to before submitting anything. You will get better results, I’m not saying you will get an approval if you were supposed to get a decline, but an underwriter can tell you if you are wasting your time on a case or will say, ‘this is what we need to get this case done.’”

For his personal business, Mr. Benamron also turns to underwriters. “When cases are open-and–shut, I don’t bother. But as soon as there is an issue that could be a problem, whether it is the amount of insurance or a health condition, I do speak to underwriters.”

Some insurers, such as AIG Life Canada, are very open to the idea of its underwriters speaking with advisors. In fact, it is encouraged.

“We promote the fact that our underwriters are open to communication with brokers,” says Hélène Châtelain, vice-president of underwriting and new business for AIG.

“It is part of our philosophy,” she says. We talk about this service at every meeting we have with advisors and our regional sales people promote it as well. It is part of the service we provide.”

Ms. Châtelain adds, “we are rare. That’s why we promote it. I don’t understand why other insurers won’t do it?” she questions. “It might be due to the fact it removes productivity, but if can make the case happen, I think it is important.”