Life Distribution And Underwriting Face Unique Challenges—But Share Common Goals

Life insurance agents have a difficult job, helping their customers meet their protection needs and goals within a fast-paced and competitive industry. In fact, Americans have more insurance options than ever before, which means vying for their disposable income is increasingly challenging.

On top of that, there’s the growing concern among life insurers that too many families are failing to protect their loved ones and businesses enough with their individual life insurance policies.

Additionally, the traditional approach to the life insurance purchase is being viewed more and more as time consuming, slow and too invasive—as overall customer experience expectations are influenced by online ordering, one and two day free shipping and highly targeted marketing.

On the other end of insurance applications are underwriters. They largely empathize with the difficult sales process and want to appropriately price each application. Also, underwriters recognize that if they don’t meet the client or agent’s pricing needs, they’ve spent time and effort on a case that won’t get placed.

Strict regulatory environment
Both agents and underwriters work in heavily regulated environments, with many of the statutory and regulatory demands overlapping. They work together to meet the financial needs and desires of customers in an ethical, fair and appropriate fashion—while also complying with the law.

While agents and underwriters each work in compliance with many overlapping requirements, there are also regulations that apply to their specific role in the sales and application process, including both governmental and non-governmental rules. In addition, agencies and carriers generally follow their own procedures and processes aimed at managing risk, various sales practices and transparency.

While these guidelines, laws and rules can feel onerous at times, both agents and underwriters benefit from managing their emotions, as well as empathizing and understanding each other’s perspective and unique challenges.

Agents are often all too aware of how long it took to get to a completed application—even as that same application looks and feels like the very first step in the process from an underwriter’s chair. Underwriters benefit from recognizing that for many of those applications, there is a months- or years-long series of meetings, discussions and reviews that led to that application.

Agents can benefit from remembering that the underwriter was not often party to the myriad information exchanges that occurred leading up to that application.

Successful sales of life insurance requires that everyone begin with the assumption that both agents and underwriters are professionals and trying to do what’s right. In 26 years in the industry, I have yet to meet with a successful, respected agent or underwriter who wouldn’t argue the benefits of clear, frank and honest communication exchanges.

The vast majority of underwriting professionals recognize that their salaries are the result of the difficult and underappreciated work that sales professionals do. Most sales professionals I’ve had the pleasure of knowing are quick to comment on their appreciation for the carrier’s need to underwrite and administer life insurance policies with an eye to the future.

Decisions that don’t meet the needs of customers, or are poorly reviewed and priced, don’t serve any of us in the long run.

No one likes a surprise
With very few exceptions, agents and underwriters share their distaste of surprises during the application process. Unfortunately, sometimes they are the reality. We best support each other by quickly and candidly bringing new, contradictory or unexpected information to each other’s attention as soon as prudently possible.

For agents, that might include presenting the complete medical and financial case, good bad or indifferent, as early as possible—or advising underwriters of changes in finances or insurability mid-underwriting. Wherever possible, it’s most effective to provide the all-important context and “rest of the story” up front, versus mid-stream as a result of information coming from elsewhere.

Underwriters are very familiar with context being a critical component of any decision and the “hows” and “whys” of an agent’s sale. It’s crucial for underwriting to keep agents informed throughout the underwriting process. Agents have a difficult job engaging and retaining a client’s interest in a sale. And when an unnecessary surprise arises, it can jeopardize the likelihood of the sale—especially if their client is faced with a decision or extra requirement late in the game because of it.

I’ve rarely encountered a situation where delivering unexpected news to an agent as soon as it’s prudent, even if difficult news, does not improve the likelihood of conserving a sale. In fact, more often than not, the underwriter/agent relationship is strengthened by the willingness to get into the foxhole together in dealing with an issue.

Change is inevitable
Without a doubt, the pace and scope of change in the life insurance industry creates the potential to increase or exacerbate tension between agents and their underwriters. Every facet of the application process is being, or will be, disrupted in the coming years.

We are seeing disruption for some of the reasons noted above, as well as the demands of our end customers whose expectations around purchase experience are forcing us to look outside of our industry to understand and improve that experience.

The growth of online sales blurs the lines between market segments and allows for the purchasing of everything from perishable foods and electronics to luxury vehicles to change customers’ expectations of our industry. We are increasingly being expected to deliver a simple and enjoyable experience that mirrors the ease of purchasing a pair of shoes online.

Duplicating that process with complex financial products that rely on the high-quality expertise and price points that traditionally required face-to-face meetings and invasive underwriting tools is daunting. Customers are increasingly demanding options around when, where and with whom they meet, without sacrificing quality, expert recommendations or price.

This is, and will only continue, impacting how and when agents interact with their customers, how they communicate with them, how they collect information and initiate applications, how they share status of applications, and ultimately how they deliver and pay for policies.

At the same time underwriters also need to react to many of those same changes while exploring and using new tools and techniques to improve the experience for agents and applicants and meeting product design and pricing experience.

To meet the needs of insurance customers with the products and services we sell in the regulated market we serve will be a challenge—but also a tremendous opportunity.

By working together to face the inevitability of change and disruption in our marketplace, I believe insurance professionals have the opportunity to encourage and provide perspective to carriers as they address needed changes to product, process and customer experience. And underwriters have a role to play in facing change head on and participating in new and innovative approaches to underwriting tools and techniques.

As a profession, we have not historically been leaders of change as we tend to focus on the tried-and-true processes honed throughout our careers. The success of our industry will include a significant role for the many dedicated and honest sales professionals who serve customers every day in protecting their financial security. The work underwriters deliver in pricing products ethically, competitively, fairly and in support of their home office pricing strategies is crucial to maintaining the trust of agents and their clients.

According to the LIMRA 2019 Insurance Barometer Report there is a significant number of un- and underinsured Americans. With new and emerging ways for customers to apply and be underwritten for life insurance, increased collaboration between underwriting and sales professionals offers the change to tap previously underserved marketplaces and deliver solutions that allow for more targeted application of our expertise.

By listening to our customers and investing in responding to their needs, we can target and focus our areas of expertise on the cases that need it, and deliver significantly improved buying experiences that grow our industry.

Where the opportunities present themselves, underwriters and agents need to challenge themselves to engage in constructive and frank dialogue at the case level and to significantly increase our industry-level collaboration. We are in this brave new world together.

John Helberg, AALU, ALMI, ACS, is chief underwriter and manager for individual life insurance at Minnesota Life Insurance Company—a Securian Financial Company. He has been working in the life insurance industry for 26 years. During his years at Securian Financial he helped develop an accelerated underwriting program and continues to research new ways to improve the overall underwriting experience for individual life insurance.

Helberg can be reached at Securian Financial, Email: