T.S. Eliot once said that “Last year’s words belong to last year’s language. And next year’s words await another voice.” That’s very beautiful and poetic, but little did we know that 2020’s voice would be heard through a mask.
December 2019 seems like such a long time ago. Like most other companies, American National was looking back on the accomplishments from the prior year and looking forward to ambitious plans made for 2020. I recall leaving the office on the last workday of 2019 with a two-sided whiteboard full of goals and plans for the next year. Things were exciting. Research and various pilots were being conducted. New opportunities were to be explored with ambitious and hopeful plans attached to each. The first few weeks of 2020 weren’t much different than the early parts of previous years. There were, to be sure, some vague stories about a viral illness in China, but like most, it wasn’t really on my radar.
That all changed on January 17, 2020. I was traveling back from an industry meeting in California when a family member called me and said that the CDC had started some health screening at a few American airports due to the virus that had originated in China. Four days later, the CDC announced the first U.S. case of COVID-19. This was followed by news of lockdowns in Wuhan, China. By January 30 the World Health Organization had declared a global health emergency. This was followed by lockdowns, travel restrictions, national emergency, the “15 days to slow the spread” effort, masks, social distancing, businesses closing, and rising unemployment.
By March 2020 we were hearing of difficulties in obtaining paramedical exams. Something had to be done if we were going to keep the flow of business continuing. In addition, we had the additional task of attempting to mitigate the risk of this new virus when still very little was known. American National’s corporate culture stresses the importance of agility, collaboration, and engagement (we refer to it as ACE culture). All of this was about to be put to the test. Underwriting, Actuarial, IT, Marketing, the Medical Director’s Office, and senior management would be tasked to change how we do business in a very short period of time.
To keep the business flowing, we adjusted our accelerated underwriting programs (Xpress and Xpress Plus underwriting). We decided that since the COVID-19 risk seemed to be less impactful in younger ages and those with no chronic health conditions, we expanded our acceleration rate on clients age 50 and under who didn’t have chronic health issues. This allowed for more cases to be approved and issued without traditional medical exams. This was accomplished by taking many proofs of concepts efforts that were in a pilot or research stage and putting them into production.
In late 2019 we had embarked on a pilot to determine the effectiveness of utilizing a secondary prescription history provider. By March 2020 we had compiled results that were impressive. We had found that by reflexively ordering data from the second provider after inadequate data was provided from the first, our meaningful hit rate substantially increased. The results came at a perfect time. Increasing our acceleration rates in response to COVID-19 required more robust real-time medical data. By enhancing our prescription history data, we were able to improve our understanding of the risk which, in turn, improved our ability to provide a non-medically examined underwriting path.
Prior to COVID-19 we had been utilizing real-time clinical lab data on an as-needed, underwriter-discretion basis. This is a tool that allows us to check for lab and other medical data that has been conducted by a couple of the nation’s largest private labs. In our effort to enhance the accelerated underwriting rates, we made this process part of our normal accelerated underwriting rules. We also eventually added medical claims and Electronic Health Records to our underwriting tool belt in the months that followed.
These efforts all helped push up our acceleration rates for those aged 50 and under, but we also had to take action to reduce the risk the virus posed at older ages, impaired risks, and foreign travel risks. Like many companies, we added underwriting restrictions to help reduce the risks of those uncertainties.
To communicate and explain these changes, the underwriting department worked closely with our marketing partners. We met regularly (in virtual meetings, of course) with marketing to explain the various changes and the reasons behind them so that they could also communicate these changes to our agency partners. In April 2020 underwriting and marketing held a joint webinar on this topic with over 1,000 in attendance. It was our highest attended webinar to date.
In July we were hit with another blow. A key industry vendor that provided paramedical exams and APS services abruptly closed shop. Another pivot was required. All hands were on deck as we shifted to other existing vendors and eventually added new service providers. This was no small effort. New vendors require new contracts with legal review, new security reviews, new training for staff, as well as extensive IT work to create new connections with new vendors. Agility, collaboration, and engagement were the name of the game once again.
Throughout the remainder of the year we were in constant review mode as the data was monitored closely. Internal data as well as data involving the virus itself. The underwriting staff worked harder than ever as many of these new processes put in place required manual workarounds. While the speed to approval increased, the amount of work required of the underwriter increased. Slowly but surely we began automating some of these new processes, but the bottom line is that our underwriting staff stepped up and made it happen.
And here we are. It’s been more than one year since COVID-19 changed everything. There seems to be light at the end of the tunnel with quite a bit of encouraging news, especially with the rollout of efficient vaccines. However, it is still too soon to tell where all this leads. What is the impact of long-COVID? What about the variants and their impact on the future efficiency of the vaccines? Time will tell.
One thing is for sure, the world of underwriting will never be the same. The use of alternative digital health data is here to stay. Proper implementation of this data is key, not only to meet mortality expectations to keep life insurance rates affordable, but also to improve client experience. Another thing that is here to stay is the paramedical exam. That is not a bad thing. The paramedical exam has been crucial in keeping the cost of insurance down. The exam and accompanying labs are outstanding tools to predict risk and, therefore, are second to none in providing information that allows the industry to appropriately underwrite risks. Contrary to popular opinion, the exam and labs are not as consumer unfriendly as they are made out to be. The industry gets very excited about finding ways to partner with our insured clients in improving their health. We get downright passionate about the prospect of helping our customers improve their lifestyle using new technology. But, what better way is there to help improve the health awareness of our clients than to provide them with a comprehensive blood and urine panel that provides a close look into their health status—markers for diabetes, kidney disease, liver disease, lipid control, etc.? Providing this information along with keys to help them improve their health based on the results is something we at American National are already doing.
That two-sided whiteboard that was full of plans and ideas for 2020 still sits in my office. I occasionally go into the office and just can’t bring myself to wipe it clean and start over. It seems to represent a time past. Maybe it even represents a bit of hubris. One virus changed all those plans. However, it also represents the idea of continuous improvement. You can’t predict everything, but it is the human spirit to keep moving on. The goals and plans for 2021 are different, but perhaps a bit wiser because they are seasoned with an experience from 2020 that taught us how much can be accomplished even when circumstances send us down a different path. I’ll be keeping those plans and goals on a spreadsheet this time.