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Spring 2001
Disability Committee Review
By Tom Kirner
Disability Consulting GroupThe theme for the Disability Committee meeting was the "Y2K Underwriting Machine" describing the group market as it continues to evolve and how we underwrite it. Topics included: Hiring, Training, and Retaining Underwriters presented by Matt Clark (CNA) and Thomas Frazier (Zurich); a two-part workshop on dealing with an under-performing case, segment, or book of LTD - Part 1 - Techniques was given by Jim DePre (Towers Perrin Re.) Sky O' Callahan (Standard), Don Canfield (IDR) - Part 2 a workshop using a sample book of business was facilitated by Mark Andruss (Fortis), and the Internal Controls and Monitoring for Underwriting presented by John Barilla (Prudential).
Presentations can be received via e-mail by sending a request to Tom Kirner at tom@dcginc.org. The Committee hosted two "Let's Talk Shop" sessions as well. These were first divided into product: STD, LTD, and Voluntary (although no one elected to participate in a discussion of voluntary), and then Large case and Small case with the dividing line being 1,000 lives.
The Committee is preparing for the June meeting in Montreal. The theme will be "Information - Sources and uses of information for the underwriter in analyzing risk." We will also host a "Let's Talk Shop" workshop.
Questions for the workshop can be sent to Tom Kirner: e-mail tom@dcginc.org, or fax 207-756-8554.
In closing, we thought you might be interested in hearing some of the things we heard during the Chicago meeting:
I'm seeing life rates that look more like AD&D rates and LTD rates that look like life rates.
I only get experience on a 500-life prospect if it's good. If you are renewing a 500-life case and use the bad experience someone will quote lower.
It is getting harder and harder to get good data on a proposal.
Underwriters are among the lower paid insurance employees.
Industry growth objectives (15% top line growth) for LTD have been too aggressive. We believe UnumProvident's experience was a result of trying to grow too fast. Wall Street would be happy with single digit top line growth.
We continue to struggle with pre-ex on STD. Want to include it for underwriting protection but are getting resistance from claim shops who are concerned that the STD pre-ex will slow down payment turn around time.
We wondered how the pending federal OSHA legislation requiring 90 days of wage replacement at 90% would impact the pricing of our non-occupational disability products.
We lamented that many of our customers and our billing areas still have problems collecting the proper premium amounts for STD and LTD plans that are core and buy-up programs.
Two new websites sounded useful - zapdata.com for free SIC code information and freeerisa.com for historic 5500 information.
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