Remote Underwriting

Listen and Learn – Drugs and Death in Mexico

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The U.S.-Mexican Border: A Changing Frontier : NPR

Several posts ago I wrote briefly about some of the problems our neighbor to the South is having with the illegal drug trade.  I did extensive work in this area while advising a US based life company on its possible entry into the Latin life markets.  This is a quick audio series that provides a good overview of what’s happening.   If you’re writing business on the border or in Mexico you need to know what’s happening in order to keep your risk assessment brain cells sharp.

I’ve been to Mexico quite a few times.  Bogota is safer now.

Guess Which Country Has the Highest Murder Rate?

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BBC NEWS | Americas | Latin America tops murder tables

If your company is doing mortality risk business in Central and South America read this article.  The time I spent working in the offshore mortality market was some of the most interesting work I’ve done.  Death is death but some of us get there in different ways.  A couple of years ago my #1 son’s high school senior trip was Mexico.  Because of the drug violence in that country I refused to fund that trip.  There have been too many disappearances.

And for a great story I’ll share some details of my trip to Bogota…

Tech Support for Remote Underwriters

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I was planning on doing some work this past Saturday until my Internet connection crashed.  After waiting a few hours (maybe the problem was out there somewhere) I got the sinking feeling my problem was internal.  I called my Internet provider and got a computer.   I followed all of the computer’s instructions for around 15 minutes before I was connected to a human.  Another 15 minutes passed and the techie on the line determined my cable modem had fried.

Panic was not an option. After all, it was Saturday and hopefully someone could get to the house early Monday so that I could begin the work week without any hassles.

“Could you possibly get someone out early Monday morning?”

“How about tomorrow?”

“Tomorrow?  It’s Sunday.”

“Yup.”

The technician arrived Sunday morning at 9:00 AM, did his techie evaluation, and told me my cable modem had fried.  45 minutes later, my new cable modem was installed and I had Internet access once again.

The take home message of my little story is simple.  Managers need to know what Internet providers their remote underwriters use and the service capabilities of each provider.  Managers also need to know what to do and who to call if the problem is determined to be a non-service provider problem.  The cable modem was provided to me by my Internet provider, so they replaced it.  If I had a wiring issue, router issue, hardware or software issue, the provider would not have helped me.

Can your remote underwriters resolve their Internet access issues on a Sunday?  If not, do they wait until Monday morning before calling and asking for help?

Are these and other technology support issues are included in your department’s operational plans?

Please tell me you have a plan.

The Financial Meltdown – Predictions for Management

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The time usually spent on reading and writing this past month was completely devoured by reading and staying current on the global financial meltdown.  It is at precisely times like this when we try to figure out what’s happening and what it means to each of us.  After absorbing a riduculous amount of information I came to the realization that this was becoming an obsession. As events continue to unfold I’m certain my obsession will only get worse.

OK.  What if I manage a life underwriting division for an insurance company?  I thought about the possibilities and decided to make some predictions.  If I’m wrong, who cares?  But if I’m right, my blog traffic will go through the roof.

In no particular order this is what I think could happen.

  1. In the future there will be fewer financial firms.  If you haven’t already noticed, this is happening at a dizzying pace.  There will be more consolidations, mergers, and divestitures all contributing to a new financial landscape.
  2. Management will ask more questions.  How do you manage concentration risk?  Do you have checks and balances in place?  Do you use external independent third parties to audit your underwriting?  If no, why not? The devil will be in the details and personally I would rather have the answers to questions like these before they get asked.
  3. The people asking these questions may be your new owners (see #1).
  4. There will be a greater emphasis on risk management rather than risk assessment and selection.  Don’t rely on your actuaries for this one.
  5. There will be more, not less, regulation.
  6. Pressures to cut costs will intensify.

Peter Drucker once said there is nothing so useless as doing efficiently that which should not be done at all.  There will be new and better models for the underwriting function that at present do not exist.  If you’re excited about remote underwriting, the future gets even better with talent spread around the world, web meetings, office-less office workers, and more.

Remote Underwriting – More Tech Advice

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Remember the saga of my crashed computer?  When I got the machine back it would not boot up so I took it back to the repair shop.  I got my machine back from the shop the following Monday or Tuesday. My local geek told me the PC booted up just fine at their shop. They tested everything again and found nothing that could have caused the problems I was having.

“It has to be one of your peripherals that is causing the problem. Reconnect each and every device, one by one until you find the device that’s causing the problem.”

Well OK then. But since I had work to do I left this for a weekend project.

Two nights ago I finally reconnected the final two pieces of equipment and discovered my machine would not boot up. Eying my external back up drive with great suspicion, I disconnected it and powered down. Guess what? My PC now works but you can forgeddabout starting the computer with the external drive attached. It’s not gonna happen.

So at the end of the day I had two different things crashing my computer. The first was diagnosed by me and fixed off site. Seems the Spybot Search and Destroy was preventing my newly installed Webroot virus program from starting up. Disabling the software from executing at Windows start up solved that. But the moral of this story is the fact that my local geek diagnosed my second problem but couldn’t fix it. They don’t make house calls. I ended up solving and fixing the second problem myself.

Here is the take home message:

My computer was down for a total of two calendar weeks. There is more to managing remote underwriters than meets the eye. What are your company’s plans and procedures to resolve remote technology issues?

Yeah…I thought so.

Remote Underwriting – More Tech Notes

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Last week was a heckuva week.  After several emails pitching me to upgrade my spyware protection service I relented under the mounting pressure.  Besides, it was only $5.  So I downloaded my anti-virus upgrade, ran the install program and promptly crashed my computer.  Ironic, eh?  The following morning, hoping that a good night’s rest would cure my computer’s refusal to boot up, I switched on the power.

Nothing.

It was at that moment I realized it wasn’t going to be a good day.

My mind started racing backwards…what did I do?

  • Downloaded and installed anti-virus software
  • Installed a new 10/100 ethernet switch
  • Installed a new uninterruptible power supply (UPS)
  • Installed and configured a new video card
  • Installation and configured dual monitors

After determining my internal power supply and hard drive were OK it had to be a software conflict.   Rather than spend too many hours trying to figure out what the conflict was I took my machine to the local shop for repairs.  Rather than work off a small notebook computer I decided to configure a hot spare to work from ( I just happened to have an old Windows machine in the house).  So ultimately my solution to my computer crash was to configure and hook up another computer.

Can your remote underwriters do this?  If your company uses remotes and you are the manager responsible for their production, what does your remote technology support plan look like?  Do you have a remote tech support plan? Does your IT area have a remote support plan?

I am still working off my hot spare five days after my initial crash.  When I picked up my main box, disconnected the spare, reconnected my main, and powered up it still didn’t boot up.  I took it back to the shop and I await its return.

But I can work.

Remote Underwriting – Better Baked Thoughts

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“Oooh, that’s scary.”

Owner of Siam Smile, a Thai restaurant in downtown Edmond, OK as I was liberally sprinkling red hot chilies over my Pad Thai.

While enjoying a plate of Pad Thai at a local restaurant it dawned on me that the debate about remote underwriting has become nothing more than an academic tussle.  On one side of the debate, there are insurance companies that totally embrace remote underwriting.  On the other side there are companies with endless reasons who do not care for the concept of remote underwriting.  But in the end, the debate is purely academic at this time.  I got a phone call the other week that convinced me of this.

A very large multi-national company placed a recruiting call to me and I had a very nice conversation with the head of their HR.  This particular company has over 100 underwriters and over 40 are remote.  This got me thinking about other companies who have embraced remote underwriters.  These firms are all big names with big budgets, good technology, and a vision for the future.

The future is here and we all better get used to it.  Scary or not.

Five Minutes of Fame (literally)

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A year ago I was in Phoenix to participate in one of the sessions at the spring SOA meeting. I was given five minutes to make a point. While five minutes is not a lot of time, it was more than enough time to make a point, especially if no one else is debating you. To celebrate my five minutes of fame I have reprinted my brief, yet scintillating talk. The point I was trying to make was underwriting needed to become an insurance company’s strategic intellectual asset. Of course, re-reading what I wrote/spoke a year ago, I never mentioned my point in exactly that fashion. Not that it mattered. After all, I was talking to a bunch of actuaries.

Society of Actuaries Life 2007 Spring Meeting

May 10th Session 43

Speed Underwriting: At Least 10 New Ideas in 90 Minutes

Strategic Outsourcing

Strategic outsourcing represents a significant shift in the way businesses operate to stay competitive in the global economy. Outsourcing strategies have evolved from short-term tactical cost savings to higher-level strategic initiatives that drive revenues and profits. Cost reduction is tactical, not strategic. As insurance companies focus on core competencies and migrate away from fixed cost to flexible variable cost models, outsourcing becomes more and more attractive. Outsourcing must be pursued on a partnership basis. The buyer should get excellent service at a reasonable cost and the provider should make a profit or service quality will suffer.[1]

Strategic outsourcing begins with careful planning. Explore your strategic options for the current reality: a supply and demand imbalance in underwriting talent that will persist for many years to come. Downsizing and demographics have combined to create the current reality. What are your company’s strategic plans to attract, acquire, and retain talent? What does your company’s long-term underwriting training program look like? Does your company have a strategy to capture its underwriting knowledge before that knowledge walks out the door?

This reality is not a short-term threat. Unfortunately, our minds do not perceive longer-term threats because the human mind is not equipped to comprehend the modern world we have created.[2] Decades of downsizing and the aging of the Boomers are simply two drivers of strategic outsourcing.

Skills and knowledge can be taught. Talent must be acquired.[3] And talent needs to be matched with the work to be done. The scarcity of talent demands different approaches.

Combined intelligently, your company’s core competencies plus extensive outsourcing strategies can improve returns on capital, mitigate risk, provide greater flexibility, and make you more responsive to the needs of your customers.

Disclaimer: Strategic Outsourcing Program LLC Edmond, Oklahoma is not me. I was doing a Google search with the term “strategic outsourcing” and I found this company based in the same town I live in.

[1] The American Management Association (AMACOM) published a guide in 1999 titled Strategic Outsourcing: A Structured approach to Outsourcing Decisions and Initiatives by Maurice Greaver.

[2] New World New Mind, Robert Ornstein and Paul Ehrlich. This is a great book published by Simon & Schuster in 1989 and will provide a fundamental understanding of our cognitive shortcomings.

[3] First, Break All the Rules, Marcus Buckingham and Curt Coffman. Another fine book from Simon & Schuster that explains why conventional thinking in business is not always correct.

Medical Information – Enough is Enough or Is It?

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My thoughts have crystalized on the amount of medical information you need to know to compently underwrite life mortality risk. Consider what follows to be totally unscientific and strong personal opinion based on experience. I developed this opinion from reading way too many APS’s in my lifetime and some recent observations from #1, the pre-Med student. After shadowing some doctors and observing a few colonoscopies, an EGD and knee arthroscopy up close and personal, #1 made this comment:

“Wow, specialists need to know a lot more than a family medicine doctor.”

Classic Duh, what do you think? But his comment got me thinking about what we do for fun and money. I have always thought I would make a good GP/Family Medicine type of doctor. Aside from the real world reasons why I didn’t pick that path, I understood intuitively why I have felt that way. I am the ultimate generalist. I like to do something intensely for a few years and then do something else. This drives my wife crazy. It’s not a real good strategy either for building up a nice pension. I also don’t recommend this strategy for career development. But hey, it’s what I am.

I’m drifting here. My thoughts have crystallized. We are underwriters. We don’t need nor will ever use the knowledge a specialist in medicine requires. All we need to be are halfway decent family medicine practitioners with an emphasis on preventative care. We need to understand what diseases and what behaviors will kill you. So how do you become a quasi-family practice person without the medical school training? I have to think about this some more. As always, comments and input are appreciated.

Remote Underwriting – Half-Baked Thoughts

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Several years ago I led a project team that designed and implemented a paperless work flow system for new business and underwriting at a company I once worked for.  I saw the future and remote underwriting definitely was going to be a significant contributor to the ability of companies to attract and retain talent.  Envision a cadre of experienced underwriters working from their homes in a human network that rewards individual members of the group for finding work not only for themselves but for others within the network as well.  Kind of a modern day intellectual collective.

At the upcoming AHOU meeting there will be a networking breakfast session on the topic of remote underwriting.  Due to a number of reasons involving comittments you really don’t want to know about, I will not be in Miami for the meeting.  But since I’m not going, I’ll toss in my two cents for whatever its worth.

“The discussion will cover all of the unique issues associated with remote underwriting, inlcuding technological concerns, training, scheduling, phone coverage, processes, management, and any other concerns brought to the discussion by attendees.”

Here we go:

  • Technology.  The technology to enable remote access to company systems has been around for many years and remote underwriting is a reality for many.  If you don’t have the technology, you better get it.  But more importantly you need to build a solid business case.  With the supply and demand equation favoring the underwriter and not the employer, each year that passes without the commitment to the technology puts a company in a more difficult position to attract talent.
  • Training.  This is a big one.  FLMI, FALU, CLU, yada, yada, yada.  Companies need to first figure out what the gaps are and what needs ought to be addressed through training.  Then create, buy, outsource, something, anything, to address your training needs.  How do you train a dispersed band of underwriters without breaking the budget?  See point number one.  Technology.  Try a webinar.  Check out http://www.gotomeeting.com.
  • Scheduling.  This is not an issue limited to remote staff.  You will have scheduling issues whether your underwriters are all under the same roof or if you have them all over the globe.
  • Phone coverage.  See scheduling above.
  • Processes.  Look for best practices.  Find out what has worked and what hasn’t for companies using remotes.  This isn’t and never will be a one size fits all answer.
  • Management.  Communicate clearly and often.  How do you make remotes feel part of the team?  What are the retention issues?  Can mentoring and coaching (not the same as training) get done?  Can remote mentoring be done at all?

Well, I think I’ve raised more questions than answers.  If someone attends this session let me know how it goes.