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Insuring the Middle Man

Simplified underwriting may be the key.

By Lucretia DiSanto Jones

Many people believe that insurance companies have turned their backs on the middle market in favor of more affluent consumers. Maria Thomson, managing principal of Thomson Management Solutions, Brimfield, Mass., agrees. She is on a self-directed crusade to bring insurers to the middle.

The key to getting insurers to reconnect with the middle market is to increase profitability by reducing the cost of doing business. Thomson, former chief actuary at both Transamerica Assurance and Monarch Life and now an entrepreneur, says the path to improving profitability in this market is streamlining policy issuance and delivery procedures. The technology to do this is already available, she says.

“Today, insurers can tap into a variety of databases to improve their underwriting results and reduce risk,” and get the policy issued and delivered faster.

Hartford Life has put some of this technology to work. The company has changed how it contacts consumers with a process called Simplify Life, which cuts the cost of writing small cases.

Focus on the emerging affluent
Robert Kerzner, executive vice president and director of Hartford Life's individual life division, developed the company's strategic plan to focus on the emerging affluent, the term the company has chosen to give to the middle market. Kerzner acknowledges that Hartford and other companies are not reaching the middle market sufficiently or efficiently.

“The numbers suggest we're not touching the middle market the way we were 10 years ago. The problem is that it takes too long to write a small case compared to the profit. Hartford saw this as a chance to penetrate a market by moving to an easier, more efficient process so the producer doesn't need to spend as much time in paperwork.”

With the Simplify Life process, Kerzner explains, producers complete the transaction, make the same amount of money, but spend half the time doing it.

Kerzner's objective with Simplify Life was to look at every aspect of how the company offers life insurance to a client. “We asked ourselves, is there a way to change the paradigm to make it easier to have financial professionals talk to their clients about life insurance? That's the thrust of penetrating the middle market. The first thing we did was change the whole premise about the way a sale should occur. We got to basics.”

Quicker turnaround
Hartford's independent producers began to find out why prospects want life insurance, determine how much they would need, then show them some rough costs. The next step is the kicker. The producer takes some basic information from the prospect—name, phone number and best time to call. The producer submits the information to Hartford's in-house tele-interviewers, who call and complete the application. They are aided by a computer system that prompts them to ask questions based on underwriting guidelines. The system will also order any medical examinations necessary. The policy is then ready for the client's signature.

“The system has the technology behind it to allow us to get the job done right with the least intrusion of time and to get the policy to the client quickly,” says Kerzner.

Thomson may very well applaud Hartford's efforts. In her crusade to get insurers into the middle market, she faces the industry’s resistance to change. Hartford has taken a risk and is willing to expand into the middle market.

“Any company willing to step out of the pack and do something different has the advantage,” she says.


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