Debunking The “Control” Myth In Teleunderwriting

Hank George, FALU, CLU, FLMI
June, 2008

At a recent lecture I did for a state underwriting association, a management underwriter for a P&C-based life insurer mentioned her continuing frustrations in trying to convince their sales representatives (once again, I use this as a synonym for agent, broker, intermediary, etc.) to accept teleunderwriting.

In this case…and so many others…the nidus for field resistance was their “concern” for “loss of control” over their clients.

The “control” myth had reared its predictable head once again!

Time to tame this toothless tiger, lest you be next to find your back against the wall trying to debunk this deeply-flawed argument against progress.

Point of Clarification

What do we mean by a “P&C-based life insurer?” We’ll pause to define this phrase because it’s an underwriting environment where the “control” myth is particularly prevalent.

“P&C,” of course, refers to property and casualty insurance…that OTHER primary domain of insurance products (knowledge of which we quickly disavow when accosted by friends and acquaintances over the high cost of auto insurance!).

Most major U.S. P&C insurers also offer life and morbidity-based products…which a small but hearty subset of their agents actually sell!

P&C-based agents’ “control” issues with teleunderwriting stem from their close, long-running relationships with their clients.

Because they sell a wide range of coverages (life, health, disability plus auto, boat, homeowner and what one calls the myriad other products the P&C side traffics in), they have far more client connectivity throughout the year than do agents who sell strictly L&H products.

Because they compete mainly against agents whose companies also offer many forms of coverage, they’re fixated on keeping control over the client’s insurance buying proclivities…lest a competitor make inroads on one product and then leverage it to sell others to the customer as well.

Hence, this sales milieu predictably spawns “control” mythologizing whenever teleinterwriting comes up.

What Is The “Control” Myth?

A confabulatory concoction which holds that when home office types or their surrogates (outsourcing) have excessive hands-on contact with clients, the agent’s hypnotic hegemony over those clients is gutted like a freshly-caught trout!

Why is this notion of control confabulatory?

Because if an agent has GENUINE control…as in, a stable of Manchurian candidates for clients, who flash anencephalic rictus grins while the agent blithely adds zeros to the proposed sums insured…that agent should be terminated with prejudice!

One hopes such egregious control scenarios are the stuff of myth…

…because, if they did exist, the LEAST undesirable manifestation of agent history taking we’d be fretting over is his phrasing the tobacco usage question as “you don’t smoke, DO YOU?”

Clearly, control – sans quotation markers - better not be real, for the sake of the carrier’s bottom line.

What, then, is the real issue here?

Morbid fear of home office meddling…which, experience teaches, is a concern not entirely devoid of validity!

Since the advent of paramedicals (and especially after nurses gave way to phlebotomists) we’ve all been periodically taken to task over allegedly “disheveled, malodorous, venipuncture-inept” examiners reeking…err, wreaking…havoc with “polite, patient, even-tempered, all-but-angelic” clients!

Given agents’ hyperbolic personas and affection for anecdote, how could things be otherwise?

Does it not, therefore, stand to reason that, upon being informed of pending roll out of teleinterviewing, thusly-disposed agents would commence writhing at the mere thought of “call center types” dragging their coveted customers away from (un)reality TV to endure a stream of nasally-droned personal questions?

Did you actually expect your agents to get all warm and fuzzy over your teleunderwriting protocol without any effort being expended on your part to forestall such negative perceptions from gaining traction?

Why isn’t an agent’s influence with his client meaningfully eroded by teleunderwriting?

Because he must inexorably do a fact-finding interview to determine his client’s insurance needs…and in so doing he learns as much about the client as he would have if he had been more formally involved in the history taking.

Without the fact-finding process, how can a rational determination be made as to which product, at what sum insured, best suits the client’s needs…let alone whether or not that client has a reasonable expectation of qualifying for coverage “as applied for?”

Teleunderwriting hasn’t replaced the fact-finding interview.

It has made it all the more essential.

The competent agent must review his client’s risk history to do his job.

If he’s smart, he will make use the application risk questions as a template when doing so.

What is the ONLY difference where teleunderwriting is concerned?

Instead of the agent formally – that is, “for the record,” - asking risk questions and recording answers…or….this task being carried off by a paramedical technician or physician (more likely to intimidate the client with a white coat effect)…the accountability for said “formal questioning” now falls to a non-threatening pleasant female (usually) voice.

The agent looses no legitimate influence – “control,” if you must – over his client.

In fact, all he “surrenders” with teleunderwriting is potential liability for an untimely faux pas while questioning his client “on the record” where matters of insurability are concerned!

Such unfortunate situations, wherein the agent fails to adequately ask and/or sufficiently record an answer to a sensitive question, have cost sales people their careers…for starters, so to speak.

Where does the “buck stop” on this issue?

With the home office.

Because we sculpt scripts and cull callers to make certain the questions are as cogent as the callers are competent.

Where the primary source of your company’s revenue (agents) is concerned, it is you who will largely determine whether or not the “control” myth becomes a cause célèbre in the months before and after teleunderwriting roll out.

This is readily accomplishable so long as the seven benchmarks are shown respect and consideration they deserve.

This is the “have you” checklist of tasks to nip the “control” myth in the bud:

Have you:

• Made your core interview and drilldown questions comprehend-able at a grade six level of cogency (sadly appropriate for Homo sapiens)?
• Wisely chosen your callers, delicately balancing cost of their services against their skill levels so as to get the very best for your money?
• Adequately tested the teleinterview process with a strategically-selected cohort of agents, soliciting – and then responding – to their feedback until you have their “buy-in” to the process?
• Involved these agents actively in the roll-out process, using their positivism to assuage early concerns on the part of their peers?
• Gone after feedback from interviewees (in a manner deferential to prevailing sensibilities), then bawdily trumpeting the rave reviews (which are inevitable, if you’ve done your job) from their clients who were teleinterviewed?
• Audited your teleinterviews both for technique and content? This must include listening to a significant batch encompassing all callers (or you will have a glass half empty).
• Taken pains to learn from experience, then fine-tuning interview and drilldown questions, providing further caller training, etc.?

If your score is 7 out of 7, BRAVO!

Just one question remains to be asked. It may be the one you LEAST want to deal with:

When you commenced generalized teleinterviewing, did you give your agents the choice of submitting new business via teleunderwriting – or – in the traditional manner?

If the answer is (which it almost always isn’t) NO, my congratulations on your intuition, tolerance for pain and hormone levels.

If the answer is YES, know that you have vitalized the naysayers, allowing them to recruit others to their pinpoint of view.

Why?

Because it is in the nature of things that there will be some bad teleinterviewing experiences, no matter how outstanding your operation.

Which will be amplified and extrapolated to be “the norm,” aided and abetted by throaty “I told you so” gloating from veteran agents whom your ill-fated policy allowed to opt out of teleunderwriting (just as they always do, on everything from laptops to asbestos-free insulation!).

Even if this has happened, all is not yet lost...

…provided you can find the wherewithal to take the last essential step.

Which must be institutionalization of teleinterviews as the sole acceptable mode of application submission.

Are all seven “have you” bases covered?

If NO, you have work to do.

If YES, carefully choose both the timing and the technique used to bring this last bit of good cheer (and it should be nothing less!) to your agents.

If you do this wisely, teleunderwriting will prevail to your considerable credit.

If you haven’t, you might wish to consider a sales career.