Forest and Trees: Missing the Point on Underwriting Education

Hank George, FALU, CLU, FLMI

There was a posting recently at lifeunderwriting.com wherein the underwriter bemoaned the fact that his company would not fund his enrollment, and that of his peers in the department, in the State of the Art™ Continuing Education Program.

This is a classic case of missing the forest for the trees, as they say. And not just because it happens to focus on the education program into which I and my colleagues at SelectX-UK have invested so much of our energy and devotion.

Many who covet such education are turned away by the “intimidating” annual enrollment of $5000 (US). They shudder at trying to wedge this into their departmental budget, anticipating that the budgetary ax will come down from “on high” and slice off this “soft” commodity.

There are two considerations here that need to be aired out.

First, education is not a “soft community,” a luxury, something to be considered only when “times are good” and monies abundant.

Those days are past anyways, as the mindset of senior industry management strives, globally, to be “lean and mean.” Today, and rightly so, anything proposed for purchase must stand up to more severe scrutiny than in the 1980s.

A “soft commodity” is, by definition, one that is optional, like putting tinted windshields on a modestly-priced new car.

How, then, could staying abreast of developments in medicine that directly impact insurability be a “soft” expenditure?

Aren’t mortality and morbidity gains touted as one of the primary sources of income…hence, profitability…in the L+H industry?

Is it sufficient to rely on ostensible generalized improvements in longevity to compensate for an obsolete database as regards the distinction between a BEST CASE and its ominous counterpart?

Look at your manuals.

How current are they REALLY?

Would you like a list of dozens of compelling considerations that I will lay you odds are either not covered, or, where the prevailing information provided to guide decision-making is inadequate in the face of today’s knowledge?

I challenge ANY manual to match our courses when it comes to the comprehensive assessment of what constitutes a BEST CASE for the impairments we write on.

If an underwriter does not appreciate when key information is staring back at him/her from a teleinterview drilldown, blood profile or MD report, how then, is that underwriter going to make the wisest decision?

The second point that needs to be made is the REAL cost of enrollment.

Let’s say you have 10 underwriters.

The cost per underwriter per course for enrollment in the 2006 CE program is approximately half of the cost of ONE APS (GPR, PMR…whatever you choose to call an MD report).

$27.78 (US)

Who would argue that $28.78 is too much to invest in equipping an underwriter to make the accurate decisions on a prevalent impairment such as hepatitis B, diabetes or increasingly-common Barrett’s esophagus?

A leading insurer with 27 underwriters just enrolled in our program.

Their unit cost, per underwriter, per course is $10.29.

6 courses = 1 MD report.

For the cost of 1 treadmill stress test, they provide 18 courses for 2 underwriters.

Which will contribute more to the bottom line?

When the matter of education comes up, please, do not allow it to be marginalized as a “soft commodity” and thus exorcised from your departmental budget. Make your case for it based on the foregoing…not to mention the growing number of audits by reinsurers, fueled by concern for the state of current underwriting prowess.

Remember, a skilled underwriter is a precious commodity in today’s market.

I know of very attractive positions that have remained unfilled for months because we stopped properly training underwriters in the 1990s and have not really resumed doing so since. The dearth of top-notch underwriters at ages 35 to 50 is appalling

Indeed, we have lured dozens and dozens of retired underwriters (many of whom have not learned anything in a decade or more and assuredly bring a vast array of misinformation to the job) to return as contract underwriters to simply move the volume of business.

But the emphasis should not be solely on “moving the business,” because our “mistakes” will be eagerly purchased and enjoy unparalleled persistency…then come back to bite us in the worst possible way, painting a very sorry picture of the underwriter who made the decision.

Is underwriter continuing education a luxury?

Just the opposite!

In fact, a popularized and oft-used phrase, taken verbatim from a television commercial, sums up the REAL situation we face if we continue to depend on our obsolete knowledge inventories:

“Pay me now…or pay me later!”

In case anyone who doesn’t know me is wondering if I “suddenly” acquired such a great appreciation of the importance of professional continuing education upon commencing the industry’s only independent education program, let me add, for the record, that I created the ALU seminar program, wrote more courses for the FALU education program than anyone, created On The Risk and the International Underwriting Congress, created and chaired 37 underwriting-focused seminars for the Society of Actuaries and published 150 technical papers on underwriting subjects – all of that before I launched Hank George Inc.