Broker Words—June 2021

The pandemic has impacted our industry to a great degree—Zooming across the kitchen table, increased digital app submission, fewer calls for paramed exams and fluids, Rx, MIB and DMV results speedier and more integrated, limits for business on an automated and accelerated underwriting basis raised, maximum issue ages lowered, and underwriting holds on those determined to be greater risks due to the potential effects of COVID-19 infection.

And the lasting health legacy of the coronavirus hasn’t yet been tabulated—the long term effects of COVID infection post recovery, including both physical and cognitive impact; delayed or forgone wellness checks, preventive procedures and routine physicals; postponed surgeries and needed treatments; dental cleaning and exams; and the psychological and physical effects of drastically disrupted routines. To say nothing of maskne, lizard hands, awkwardly placed sanitizer saturated pocket wet spots, your wife insisting you wipe down every freaking thing you are even thinking about touching, and walking around with an imaginary (or in some TikToked treasures not) six foot hula hoop around you.

And then there’s the risk of thrombosis from cells attempting to defend against the microchip injected along with the COVID vaccine. (Really?!? I myself entertain more positive delusions.)

LIMRA stats from 2020 reveal that only 54 percent of Americans have any life insurance coverage, a notable decline from 63 percent just a decade ago. Further, there are 60 million households with an average life insurance gap of $200,000. Those numbers by themselves might lead one to postulate that the un- and under-insured problem could be mitigated (and monetized) if we could only find a way to reach this vast market with a) convincing messaging that could educate and inform the populace in such a way as to reinforce the need via real life consequences of inaction on those most loved and left behind; b) concurrently changing negative perceptions of the life insurance industry as a whole; and, c) a refined technological process of acquiring prospects, presenting options, submitting applications in good order and distributing policies in a speedy, cost effective and sufficiently profitable way. Problem solved, right? Easy as 1,2,3… We should be able to find a way to make the life insurance purchase more actionably important than the new bass boat or the flashier, newer car. And easy and quick enough to sooner vault the tendency/obsessive drive to procrastinate. COVID-19 has helped some with that last bit.

I wonder how many of those folks are either uninsurable or rated at a level that makes sufficient coverage simply too expensive for their already squeezed budget. But there must be a decent percentage who explored only one source, perhaps even just their P&C agency’s annual life insurance mailer, and after this too brief investigation believed their health (or age) made the purchase untenable. Discouraged by the health questions sufficiently to convince themselves that they couldn’t obtain coverage at all. Or see that a certain policy with affordable rates today is age banded and the possibility of a convergence of rate versus available income in the future might force abandonment of the policy with nothing to show for it but decades of lost premiums and lost alternative spending opportunities. Many of the underinsured are covered only by group coverage obtained at the workplace, and thank God for that, but typical amounts cover basic funeral expenses and not that much else, to say nothing of the likelihood that policies are abandoned when changing or between jobs—particularly, as too often in this pandemic, when the period of unemployment is lengthy and the next opportunity seems lost in the fog.

So is the race to top tech, today COVIDly need based, also surreptitiously postulated as a panacea for reaching a nearly inexhaustible source of prospects among the uninsured? Or is that vast perceived herd actually thinned—by unknown complications of survived coronavirus infection, age and its effect on risk, and neglected health maintenance conventions in the short term, and more steadfast statistically by those who don’t feasibly qualify due to some combination of income, age and health? How many will Hal refuse to accept after filtering them through his various protocols?

Obviously misinformation, distrust, disinclination, and “tomorrow” present a significant but hurdleably-reached middle market mass who really should be contacted and convinced. But I’m not sure C-3PO and R2D2 are currently particularly suited to execute that task, at least not by themselves. How many of the reported un- and under-insured populate the subset of unable to automatically insure?

We’ve been hearing conspiracy theorists prognosticating about “black box” underwriting for years. Will the Coronavirus redact the flourish, diligence, and birthright of the lifeblood of the brokerage business, the BGAs and the agents they serve, by virtually eliminating the human element of fighting for the best possible rate for clients “outside the box?” Most vexing: Is automated accelerated underwriting Pied Pipering our brokerage industry toward seeking and selling to only the most likely to be approved? Isn’t that the formula we once viewed with entrepreneurial disdain as the forced realm of the career agent? Will automated accelerated underwriting truly help significantly with the un- and under-insured problem?

I love the white plastic Stormtrooper robot insurance “advisor” commercials…I’m waiting for the one to come out where he pulls out a blaster and PEWPEWPEWs a guy who comes in that is obviously a KC barbeque devotee who thinks the almost exclusive purpose of plants is for feeding his food. Might be my doppelganger.[SPH]