Author: Bill Atlee

5 Days Cost Carriers Millions of Dollars.

At iPipeline, we’ve conducted the most expansive artificial intelligence and machine learning project known to the industry. Our mission was to analyze over 3 million life insurance applications submitted over the last 2 years and across 62 life insurance companies. The purpose? Enable machines to learn recognizable patterns that cause underwriting delays, missing requirements, agent behavior, case manager interactions, and any internal/external factors that could affect placement ratio.

Our goal was to increase the SPEED of underwriting by removing the obstacles that affect policy approval times.

Carriers measure underwriting speed in “cycle times”, and their success by “placement ratio”. Carriers typically define cycle time as the overall elapsed time from the date the carrier receives a submitted application until the date an underwriting decision is made. Cycle times are tricky because days are often not concurrent- instead, they’re a series of start, stop, and wait times. In traditional underwriting, it’s not uncommon for underwriters to wait on paramedical exams, APS’s, and agent responses- many factors that are beyond their control. We found machine learning was necessary to gather, organize and analyze these factors. These relationships were then plotted onto a placement ratio graph for all participating carriers. The graph revealed where the industry’s ratios plateaued, rose, and fell. We then took the same approach to graphing cycle times on each submitted application. Again, we saw various fluctuations. But here’s where the magic occurred: when we overlapped these two graphics, we found a precise day where industry placement ratio significantly dropped.

Across 62 carriers and millions of cases, the most impactful day was day 55.

However, the real “aha” moment was that cases still in underwriting between days 55 and 60 have a 13% decrease in placement ratio. This 5-day window after the day 55 “hour of sour” has huge financial consequences to carriers, so we needed to take a deeper dive. We had the machines segment applicants to filter those that fell below the blue line and purchased a policy. These green folks were then further delineated into policyholders that bought regardless of time, and those that also bought but had a bad experience due to time lags.

Above the blue line, you can see in red all the applicants that didn’t buy. Within this group of red folks, there’s a group that “will never buy”. This may be a result of them changing their mind, maybe losing their job, possibly received a worse underwriting offer, or simply went with another carrier. So the real focus should be on the applicants that did not buy due to lack of SPEED.

If the average carrier could shave 5 days off its’ cycle time, they could shift a block of applicants back into the green side, resulting in millions of additional premium dollars.

Remember, day 55 is the average across all our participating carriers and all applicant’s ages and face amounts together. The reality is, you can expect younger applicants, with lower face amounts, to fly through underwriting faster than older applicants, with higher face amounts. This is where machine learning really excels and helps uncover the “hour of sour” where placement ratio starts to drop each day.

Cycle Time Measured: Submission to In-Force

Machines can even go deeper by learning the effects that speed has on placement based on gender and product types. Clearly, speed matters. So, ask yourself, “where are you leaking time”? What are the long poles in your “outstanding requirements” tent that are not necessary, chewing up time, or can be fixed with modern technology?

Let’s have a look at some of the top underwriting delays across 62 life carriers:

Outstanding RequirementAverage Carrier’s Collection TimeResponsible Party
APS’s orders19.8 daysCarrier
Signed illustration18.7 daysAgent
Paramedical exam15.2 daysAgent/Insured
Signed Supplemental forms14.4 daysAgent
Missing application data10.3 daysAgent
APS review1.4 daysCarrier
Data entry1.3 daysCarrier

Without a doubt, agent behavior has an impact on underwriting speed. Carriers should be looking at both internal and external factors that contribute to a loss of speed. But this exercise will have little value if the carrier has no industry benchmark with which to compare themselves on speed.

iPipeline’s Resonant does exactly that and more. Resonant tracks millions of underwriting decisions across carriers and uses predictive analytics to optimize underwriting throughput. Once Resonant understands the desired underwriting path, it focuses on the toolsets necessary to execute those specified outcomes.

Resonant is built to shorten your underwriting long poles from submission to decision by providing four key modules to help you shorten your cycle time and increase placement ratio.

1) Workbench – where case managers and underwriters track and manage their individual cases with all the information needed to make a decision at their fingertips.
2) Decision Engine – this houses not only the complexity of underwriting, but also automates the entire new business process including robotic workflow routing of next steps to the right person at the right time.
3) Guideline Manager – provides you with the ability to build and modify the rules that drive the Decision Engine – not only Underwriting guidelines, but also Product, Workflow, NIGO and Suitability.
4) Correspondence – faster messaging to agents and clients.
5) OR Real-Time Dashboards – manage the pending inventory in real-time and quickly take action on cases approaching the “hour of sour”.

The Workbench and Decision Engine/Guideline Manager modules can be used separately or purchased as a suite. Either strategy will enable Resonant to help you to transform underwriting and modernize your technology.
When you’re ready, Resonant will integrate with your e-Application and offer your agents “instant decisioning” on your products that make the most sense. Standard integrations with third party evidence provider tools enable access to critical data in real time. Resonant can provide you with one process to handle the entire spectrum of underwriting from instant to accelerated to traditional.

Finally! A modern underwriting tool with all the capabilities you need, wrapped together in an advanced analytics and industry benchmarking solution. Built by underwriters, for underwriters.

Five Mistakes Agents Make with Permanent Quoting

Agents need to be able to react to client pricing objections in the field. But let’s face it- lugging a laptop out to a client meeting is clumsy, and distracting when trying to present. Not to mention the fact that illustration software is awkward to use in front of clients. So it gets left behind, and agents make critical mistakes that waste time and lengthen the selling process.


Here are the top 5 mistakes agents make with permanent quoting:

  1. Quoting before knowing
    Pre-running illustrations to avoid running them in front of clients is a fool’s errand. Without knowing the client’s premium tolerance, 90% of scenarios end up in the trash, wasting valuable time.
  2. Hopping on the “health class” mystery tour
    Agents are typically unaware of a client’s “true” medical background or lifestyle at the quoting stage, resulting in an assumed health class and often setting wrong pricing expectations with the client. This misalignment causes higher “not taken” policies.
  3. Whiffing on the client curveball
    Clients throw unexpected objections that require agents to adjust illustration options on the fly. And we already talked about how awkward that software is to use in front of clients, so they avoid it, causing unnecessary delays and multiple client meetings.
  4. Dying by the PDF
    Flipping through lengthy PDFs of calculations and disclosures is a presentation nightmare. Not only is it confusing to a customer, but it’s a difficult experience showing clients death benefit options, payment lengths, premiums and products hunched over a stack of 8 x 11 papers.
  5. Getting stuck in a wet world
    Illustrations are simply projections, that for compliance reasons must be signed to acknowledge the understanding of their disclosures. Why is a “wet” signature still used for collection?
    e-Signing accommodates face-to-face or remote selling, enabling deals to close faster.

Finally… a solution

We solved these quoting problems plaguing the industry by allowing agents to react instantly to client needs. No running clunky illustrations software, no pre-running multiple illustrations in advance of a meeting. This mobile experience redefines how agents quote and present a traditional illustration to customers, without having to replace your existing software. This innovation will change the way agents sell and will make the entire process more efficient at every level.

Contact Naish Berran at nberran@ipipeline.com to request a demo.

When Was the Last Time You Gave an Inforce Illustration to Your Policyholders? It’s Time.

Carriers Are Feeling the Impact of Negative Interest Rates

Without a doubt, carriers are under enormous pressure to maintain profitability in a low interest rate environment. Historically low interest rates over the last 10 years have pushed many carriers into a negative interest rate environment, meaning the money carriers invested in the open market cannot earn what they promised policyholders in contracts sold many years ago when yields were at 10%. Millions of universal life contracts, as well as interest-sensitive whole life policies, offered guaranteed interest rates of 4-5% and guaranteed cash value. Most of these older contracts are now paying the minimum interest rate guarantee (maybe 3%) and in some cases, carriers have raised their mortality rates to offset these losses. The impact on policyholders: their contracts are under-performing, which results in involuntary lapse or policyholders that outlive their contracts.

Policyholders Deserve to Know

The fact is, the only way to give a policyholder a present snapshot of the “health of their policy” is to run an inforce illustration. These new projections can give a client a good indication on how the policy values will perform at current assumptions. Doesn’t every policyowner deserve to know from their carrier today how future projections impact their financial expectation? There’s a problem though- most of the old illustration software that calculates these projections is sitting on old architecture and can’t scale. Why wasn’t this illustration software modernized on new infrastructure? The answer: because the majority of these products have been discontinued and are no longer sold through agents. Consequently, agents don’t need to access it. This software is usually used by the home office staff to satisfy an inforce illustration request from an agent or policyholder… and less than 1% of policyholders receive an inforce illustration each year.

Can the Course Be Corrected?

If most carriers’ inforce illustration software resides on Windows 95/98 machines, mainframes, or is hand calculated by actuaries, it’s virtually impossible to provide every policyholder with current projections each year. The solution simply doesn’t scale to educate existing policyholders on their policy performance.

Here’s what I mean by not scaling- Let’s say you have 500,000 policyholders on your inforce block and you want to give each policyholder an inforce illustration. That would be 500,000 inforce illustrations that the home office would have to manually run each year. Sound like it’s not humanly possible? Let’s look beyond this assumption.

Imagine the complete irresponsibility of simply telling policyholders that their policies are under-performing, and not providing them with ways to course correct. That alone would generate tens of thousands of calls from panicked policyholders into a carrier’s call center. So providing policyholders with options is a must. For example, can they reduce their face amount or add premium to extend the policy years farther into the future? We factored that it would take an additional 8 inforce illustrations for each policyholder to provide these critical options. You did that math correctly: this would mean running 4,000,000 inforce illustrations (500,000 policyholders x 8 illustration options each) to accomplish this task- daunting at best! 

Why It Needs to Be Done…Now

Our industry has had over 6.6 billion dollars in class action suits over the last several years for improperly informing their policyholders of this ticking time bomb. It’s time we solve this problem. It’s our fiduciary responsibility as an industry to meet policyholder expectations.

We at iPipeline have a solution for this industry-wide dilemma- it’s innovative, avoids the financial burden of rewriting all of a carriers’ legacy inforce illustration software, and makes the task far more approachable.

I’m very passionate about this topic, and I’m looking for your thoughts as well. 

How Our Robots Ran 30 Million Illustrations in 24 Hours

Last year, our industry ran 400 million illustrations for permanent life insurance, 95% of which ended up in the trash can. Agents and their back-office staff wasted thousands of man-hours a week generating 10-20-page PDFs that are seen by a client. Why the insanity? It’s not because the insurance commissioner tells us that we have to do it this way. It’s because of the way insurance agents sell.

When agents meet a prospect for the first time, they typically don’t know the details of the prospect’s insurance needs, medical background, or price tolerance. Consequently, they pre-run multiple illustration scenarios to provide prospects with various options.

They do this in advance to avoid the clumsy nature of running carrier illustration software in front of a prospect. This madness will seemingly never go away as long as clients want options, illustrations software remains complex, and agents desire a smoother selling experience.

What if an agent could go out in the field with no paper illustrations, avoid dozens of confusing PDFs, and clunky illustration software, yet still react quickly to client curve balls…

How? iSolve.

iSolve teaches robots how to pre-run millions of illustration scenarios each month and stores these calculations in a massive online database. iSolve then wraps an intuitive user-friendly interface around these pre-run calculations, allowing an agent to use their smartphone, tablet, or laptop to instantly display various product options.

When the agent has met the client’s product and pricing expectations, the agent simply clicks a button and an NAIC-compliant illustration is rendered for all parties to e-Sign. iSolve also integrates directly into iGO e-App, making it simple for the agent to digitally apply for coverage.

As a life insurance agent that founded iPipeline over 20 years ago, I know what it’s like to be in the field with clients, and how much of an obstacle illustrations scenarios are to rapidly moving sales. Alongside my colleagues, we have developed this new illustrations innovation, iSolve, to provide digital access to infinite illustrations for a possible sales scenario. No more “wouldn’t it be nice if…” Just 30 million pre-run illustrations right at your fingertips.

Did I pique your interest? Explore the power of iSolve in my OnDemand webinar.

The Secret to Increasing Agent Adoption of e-Apps

There’s no sense in sugar-coating it, paper applications are a huge impediment to digitizing the insurance industry. To reach the level of modernization taking place in other verticals, it’s critical to shift the agent from paper to a digital experience. Nowhere is this need more prevalent than in the realm of final expense, where there is a large volume of applications, mostly on paper, for small premium and commission.

What’s holding us back? Why does the industry continue to use paper when e-Apps exist? Simply put, the issue lies in agent adoption. An insurance company can spend thousands of dollars modernizing their legacy systems, but it’s all for naught if agents continue to submit applications on paper.

Why aren’t they adopting e-Apps that seemingly provide them with an enhanced selling experience? We usually hear the excuse that these agents are older – and so are their customers – insinuating that neither party is technologically-savvy enough to submit an application electronically. We’re not buying it.

In 2018, agents have technology in the palm of their hand that allows them to complete any daily task within minutes, and they’re taking full advantage of that ability. They’re depositing checks, paying bills, ordering tickets to sporting events, and using google maps, all from their phone. They’re tech-savvy enough in their personal life, so there must be another reason they won’t leverage technology in their workday.

What we’ve found is that paper better serves them when they’re out in the field, especially when selling Final Expense policies. Paper doesn’t rely on a Wi-Fi connection. You don’t need a power cord to fill out a paper application. And paper surely doesn’t require you to sit around waiting for the applicant’s wife’s social security number, all for a low commission sale.

How do we get these agents to change their behavior and adopt a more efficient, cost-effective model, when paper gets them out the door swiftly? We need to give them a WiIfM – a “What’s in It for Me?” – and significantly enhance their experience enough to abandon the perks of paper. If we can offer agents the WiIfM, insurance companies can reap the benefits of modernization.

We recently worked with a Final Expense carrier that knew this problem well. Their agents were submitting 100,000 applications a year, all on paper, and spending an additional $50 for third-party call centers to gain voice signatures. That’s $5 million dollars a year in call center fees, and countless hours of rework for the agent.

But these Final Expense sales are valuable money that agents don’t want to leave on the table. They want that sale, so how do we create a digital experience that appeals to the agents more than paper, reduces overhead, and promotes modernization for insurance companies?

The first thing we did was removed the need for a Wi-Fi connection, by building a mobile-friendly e-App that operates on cellular data. This allows the agent to utilize their data-capable phone or tablet to complete knockout questions and finalize the policy application. No need to bring a laptop. No need for a Wi-Fi connection.

Second, we eliminated the costly, process-slowing call center. Built-in e-Signature capabilities let the applicants sign on the agent’s phone and authorize the release of FCRA records with the swipe of their finger. Our mobile solution will call out to third-party data providers to retrieve the client’s motor vehicle records, prescription history, etc., while the agent continues to fill out the insurance application on that same device.

But as we know, it doesn’t excite an agent to put things In Good Order. Speeding up the application process and reducing overhead is great, but we had to give the agents more, something that makes it worth their time to complete the application correctly. Where is their WiIfM?

It’s in instant decisioning. Our philosophy is “know before you go”. We want the agent to know the medical decision before they walk out of the prospect’s door, saving them another possible on-site visit and hours of back-and-forth to get an application completed sufficiently enough to go to underwriting.

To make this possible, we integrated our instant underwriting solution into our mobile e-App platform, allowing agents to receive a decision before they leave the first sales meeting. They can complete a Final Expense application, have it underwritten, and collect payment all in one meeting. That’s not doable when working with paper.

Fortunately, we’re no longer reliant on paper, or even a WiFi connection, to complete a Final Expense life insurance sale. Even more importantly, agents have their incentive to adopt the technology that helps you move your business into the 21st century. No more NiGO applications. No more WiFi passwords. No more call centers. No more second visits. No more outdated processes. No more struggle to get your agents to adopt technology. Know before you go.