Let’s Talk About the 5 Days That Cost Carriers Millions of Dollars.
If you were asked to take a guess at what the pivotal day for cases in underwriting was, what would you say? We’ve uncovered this day, the “Hour of Sour”, that results in a 13% decrease in placement ratio. Talk about an underwriting ‘aha’ moment! Join Bill Atlee, Founder and Chief Innovation Officer at iPipeline, as he discusses this precise day and what it means in terms of millions of dollars being left on the table.
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:
Average Carrier’s Collection Time
Signed Supplemental forms
Missing application data
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.
Instant Decisioning for Life Insurance Accelerates Sales in COVID-19 Pandemic
Exton, PA (November 23, 2020) – iPipeline® – a leading provider of low code cloud-based software solutions for the life insurance and financial services industry – today announced Pekin Life Insurance Company has integrated Resonant® New Business and Underwriting into their new business platform to provide point-of-sale (POS) instant decisioning within iGO® e-App, the most widely used, wizard-based e-Application among carriers and agents in the US.
“POS instant decisioning is something that we have long been advocating at iPipeline. With the current COVID-19 pandemic and the obstacles being faced by both agents and their clients, POS automation can be of enormous benefit,” said Larry Berran, CEO, iPipeline. “In Pekin Life’s new workflow, the life insurance case is submitted through iGO e-App to Resonant and the necessary automated underwriting actions take place, based on predefined rules. This accelerated approach to instant decisioning for life insurance ultimately leads to better outcomes for both the insurer and the customer, particularly at a time when contactless selling has become the new norm.”
“iPipeline is transforming how we think about the new business workflow and how we help our agents sell life insurance products to their clients. Our next-gen straight-through processing platform has advanced to the point with Resonant where we are now able to provide the agent with an instant underwriting decision with no human interaction,” said Jocelyn Duncan at Pekin Life, VP of Life Administration. “In the future, our plans are to further enhance the platform functionality and increase straight-through processing speed by reducing human interaction on a wider array of products and including DocFast® e-Delivery to fully automate policy issuance. iPipeline has continued to innovate with us on many fronts this year. The results of this partnership are helping us to maintain and build upon our market momentum during the COVID-19 pandemic and offer the valuable protections so many families need at this time.”
To learn how you can implement iPipeline’s Instant Issue products to automate how your products are sold, contact email@example.com or call 1-800-758-0824, option 2.
About Pekin Life Insurance Company Pekin Insurance is a group name adopted to designate the combined operation of The Farmers Automobile Insurance Association, Pekin Insurance Company, PAC, Inc., Pekin Select Insurance Company, and Pekin Life Insurance Company.
Pekin Insurance has been in business since 1921 and is one of the leading insurers in the state of Illinois, providing multiple lines of insurance. Pekin Insurance offers insurance coverage in 21 states through its growing agency force, which now totals 1,500 independent agencies and 8,500 insurance producers. The company is headquartered in Pekin, Illinois, with service offices at Phoenix, Arizona; O’Fallon, Rockford, and Warrenville, Illinois; Indianapolis, Indiana; Des Moines, Iowa; Columbus, Ohio; and Appleton, Wisconsin. Visit us at www.pekininsurance.com
About iPipeline iPipeline is a leading provider of low code, cloud-based software solutions for the life insurance and financial services industry. Through our SSG Digital, end-to-end platform, we accelerate and simplify sales, compliance, operations, and support. We provide process automation and seamless integration between every participant in our ecosystem including carriers, agents, general agencies, advisors, broker-dealers, RIAs, banks, securities/mutual fund firms, and their consumers on a global basis. Our innovative solutions include pre-sales support, new business and underwriting, policy administration, point-of-sale execution of applications, post-sale support, data analysis, reporting, user-driven configuration, consumer delivery and self-service, and agency and firm management.
iPipeline’s platform is used by approximately 450 carriers and fund companies, 1,400 distributors and financial institutions, and their agents and licensed advisors in a cloud-based environment. With headquarters in Exton, Pennsylvania, iPipeline has locations in Boston, Bromley (UK), Burlington (Canada), Cheltenham (UK), Dallas, Davidson, Fort Lauderdale, Huntersville, Ontario (CA), Philadelphia, Pleasanton, and Salt Lake City. Visit www.ipipeline.com.
Driving Higher Placement Ratios and BGA Engagement
In the modern life insurance environment, the criticality of the customer experience cannot be overstated. Accelerating the application process, and removing the disconnect between need and execution, is the key to helping more people get insured.
Listen to Laura Morrison, VP of Sales and Chief Channel Officer of Sagicor Life Insurance Company, as she shares their experience of process improvement. By allowing the customer experience to drive their decisions for digital investments and product design, they have seen higher placement ratios and increased BGA engagement.
Laura explores the benefits of their fluidless, no telemed workflow of iGO® — Resonant® — DocFast®, which has resulted in client decisioning at the point of sale.
This is an accelerated underwriting discussion you won’t want to miss!