Reinsurance DIRECT Underwriting: A Strategic New Approach to Challenging Cases
Our AgencyONE 100 Advisors are veterans of the life insurance business and understand the importance of reinsurance in the placement of their larger cases. That said, we are pleased to announce a new and powerful underwriting opportunity that will help to shift some of your more difficult cases into the PAID column! AgencyONE has been selected as a PILOT site for testing a NEW DIRECT UNDERWRITING program with a highly rated company that has approximately $3.5T of life reinsurance in force. AgencyONE has had remarkable success in the first 60 days of working with this reinsurer as several of our advisor’s large cases were granted IMPROVED underwriting status by their underwriting team. This allowed our carrier partners to assign their RISK component to our reinsurer and issue policies that were otherwise NOT going to be placed! This is a WIN for the Carrier, Reinsurer, and your Clients!
A Selective Tool for Certain Cases
This underwriting tool is for selective use and NOT for every case situation. However, when carrier underwriting is short of the mark, you now have a new and powerful underwriting option to consider. This ONE Idea examines 4 case studies and the very important role the Reinsurance Direct Underwriting program had in the placement of problematic and difficult cases.
As you know, AgencyONE does NOT SHOTGUN business into the marketplace. If a case is sent shotgun to 15 different companies, that means that 14 companies will be left without a case, if the case even places at all. AgencyONE has a reputation for DIRECTING business and TARGETING the RIGHT PRODUCT solution while GUIDING the case towards the expected underwriting result. Our very high placement ratios on Informal Inquiry business reflects our professional underwriting philosophy and respect for the home office underwriter’s time. Generally speaking, any company we have directed a case to has about a 1 in 3 chance to “win” the case.
Having a direct reinsurance relationship gives AgencyONE the ability to send your larger cases DIRECTLY into reinsurance underwriting UPFRONT! This program is the KEY to matching our negotiated reinsurance underwriting to life insurance carriers – who have a treaty with this reinsurer – and their products that satisfy your clients’ needs!
Additionally, in a situation where a carrier decides to rate, postpone, or otherwise provide an underwriting decision that does not match up with our expectations, we can take the case DIRECTLY to our reinsurance underwriting team for a second opinion!
Case Study #1
- Survivorship policy AND Individual policy on male needed
- Individual male policy required guarantees and a 10-35 situation
- AgencyONE preliminary underwriting opinion: male and female risks – PREFERRED NT
The survivorship policy was placed inforce without a hiccup. However, the individual male case was targeted to two specific carrier partners as “best product” selections for a Variable Life contract with guarantees. This part of the case involved an $844,000 10-35 possibility. AgencyONE expected Preferred ratings but did not get them from either carrier, upfront OR on appeal. AgencyONE then took the case for a Second Opinion to our reinsurance underwriting team and they agreed that the client COULD be considered on a PREFERRED basis. We chose SECURIAN as the carrier to align with this case because of superior product performance under these specific circumstances. Securian was now able to ISSUE the coverage at PREFERRED with full reinsurance support of the risk! $2.7 million in coverage for the client at Preferred Rates and the rescue of $844,000 in 10-35 funds! A win for everyone!
Case Study #2
- Kidney transplant client
- $5 million of protection needed
The advisor submitted formal applications and an AgencyONE HIPAA targeting a specific carrier for the case without first discussing it with the AgencyONE underwriting team. The advisor chose the wrong carrier which resulted in a Table 8 offer. The carrier would not budge in negotiations. AgencyONE ran a series of “what if” illustration scenarios for other carrier selections but opted to go to our reinsurance underwriting team UPFRONT. The risk was negotiated with reinsurance FIRST and resulted in a Table 4 offer which allowed placement with a Cincinnati Life product matchup. The premium was nearly $60,000. Another win for everyone!
Case Study #3
- TYPE I Diabetic since age 13 with a high substandard rating
- $3 million of protection needed
AgencyONE received a formal submission and an AgencyONE HIPAA for $3 million of protection. While it is not unusual for a Type I diabetic early onset to be declined outright by many carriers, the selected carrier made an offer. However, the offer was a high substandard rating and the numbers did not fit the case or the client’s budget.
Knowing we needed a better underwriting offer to make this case work, an informal submission to our reinsurance partner was the next best step. The file was submitted directly to our reinsurance partner’s underwriting team who, given the client’s excellent diabetic control and renal functions, was able to provide a tentative Table 4 offer. With an offer in place, AgencyONE’s underwriting team was able to “match” the reinsurance offer with participating carriers. This case matched with Protective Life products. The client was so pleased with “the numbers” that this term case turned into a split case with both PERMANENT protection and an additional TERM sale. Another win for everyone!
Case Study #4
- Cash accumulation needed
- $50,000 annual premium budget
- Advisor – Targeted Nationwide product, Standard risk expected
If you send a case to 3 companies, it is not unusual to get 3 different opinions. In this final case example, the advisor targeted NATIONWIDE for a $50,000 PREMIUM cash accumulation sale for the NEW HEIGHTS Index Accumulator product. A STANDARD underwriting assessment was expected, but a substandard offer came back that was not placeable. AgencyONE took the case directly to our reinsurance underwriting team and negotiated a possible STANDARD offer. Nationwide IS a participating carrier with our Reinsurance Direct Underwriting program. We went back to Nationwide and aligned the reinsurance support which allowed us to ISSUE the Nationwide Product at the desired STANDARD rate class!! Another win for all parties!
AgencyONE has chosen to work with a small group of advisors – our AgencyONE 100 – in a very big way! This small group approach allows us to provide unmatched, personalized service. AgencyONE’s close working relationships with our strategic partners in the carrier space and in the reinsurance arena means we can offer YOU the highest level solutions and access to the most specialized programs.
As professional advisors, you are free to choose with whom you do business. When you are thinking about WHERE to direct your business in 2023, we sincerely hope you will consider the AgencyONE team.
Please contact AgencyONE’s Underwriting Department at 301.803.7500 for more information or to discuss a case.