GUAA Risk Review

Spring 1999

Disability Committee Update

By Mary Everett
Relistar Re

The Disability Committee hosted three presentations and one workshop in Atlanta. Curt Zepeda, Principal; Joe Moore, Guardian; and Sonia Davis, D&H presented the first session, Small Group Underwriting. They defined Small Group as employers with two to nine employees. This market is under-penetrated and large - 25 million employees, growing 31% since 1980 - presenting an opportunity for LTD insurers. The three panelists discussed how each company approaches the market for product design and underwriting; a lively Q&A session followed.

The topic of the second session was Large Group Distribution Issues. Ed Campbell, HRMP; Phil Lacy, Royal & Sun Alliance; and Rick Denman, Metropolitan discussed the challenges of working on cases over 1,000 lives. Ed defined large groups (over 1,000 lives, experience rated, greater customization), as well as distribution outlets. Phil covered the underwriting process and the RFP, a fairly standard part of the process. From a benefits perspective, Rick talked about the role of the claims operation in the process from pre-sale to post-sale implementation. On large cases, benefits underwriters have many details to consider.

The Disability Committee followed a different format for the Let's Talk Shop segment. We broke into smaller groups using prepared questions that the committee had solicited before the segment; this resulted in a great discussion. Also, the smaller-sized groups allowed more people to air their views. The participants agreed this was an interesting and worthwhile approach to Let's Talk Shop.

Mark Andruss of Fortis Benefits presented our final session on LTD Distribution. He illustrated a model to calculate the expected sales from a given number of reps, spending a given amount of time on sales, processing a certain number of proposals, with an assumed closing ratio and case size. While we may have differences in these factors using a tool like this is useful as a predictor of sales. We hope to put this model on the GUAA web site for anyone interested.

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