Under the influence

26 November 2009

Peter Le Beau Protection

I recently chaired the Medicals Direct, Panorama conference which was well covered in Money Marketing. I spent my early career as an underwriter so I have a more than passing interest in the evolution of the profession.

I have to say I was impressed, up to a point, by the research results that I produced after surveying the leading figures in the underwriting world.

Over 20 different providers took part as well as many of the leading reinsurers. Research only ever represents a snapshot of the views of a group at a particular point in time and, of course, these change quite quickly in response to market developments.

The highlights have received quite a lot of coverage elsewhere so I will not pore in detail over them but I think there were some very interesting points to emerge.

Perhaps unsurprisingly, the sample were pretty clear that tele-underwriting was a very useful technique and was producing information that was much more relevant than the GPR - the doctor’s report that was thought to be the fundamental plank of information when I was underwriting.
In fact, people were not very impressed by the quality, cost and overall usefulness of doctors’ reports now. The delays in completing very expensive reports which sometimes provide paltry information suggests that the industry is moving on to other techniques of which big and little T tele-underwriting are currently the most frequently used.

I was also very interested to see that almost all companies involved their underwriter in product development. It astonishes me that you could design a protection product without doing so and, similarly, almost all underwriters are very involved in implementing their companies’ treating customers fairly strategy.

I also asked if the sample felt that the role of the underwriting manager is growing in importance. There was a split opinion on this one but generally the feeling was that it is. This will continue to be the case as long as the underwriter has useful expertise.

In the 1970s, some underwriters strove to interpret ECG (electrocardiography) as if it represented the most useful skill they could develop.
If you employ senior cardiologists, it seems a slightly redundant skill when the 21st century underwriter has to be someone who understands risk, how to recognise, measure and alleviate it, as well as how to integrate proportionate underwriting techniques into the overall office processes.

If we had done this survey in the 1970s, I do not think anyone would have expected underwriters to one day be described this way. But perhaps that might explain why the status of underwriters reduced so much in many places. Thankfully, that status is rising again now. If it doesn’t, we will not have much of a protection industry.

Peter Le Beau is managing director of Le Beau Visage

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