Issue: November 2019 English By Lisa Bolduc, Life/Health Market Research,
Project Leader, Portland Region: North America
Gen Re
is pleased to share this summary of key highlights from our 2019 U.S. Group Medical Evidence of Insurability (EOI)
Underwriting Survey. The full report focuses on the amount of staff
and the methods used by companies to process EOI applications. The
comprehensive report is made available only to participating companies.
Twenty
companies participated and all reported that they track EOI data for their
Group Term Life, Short Term Disability and Long Term Disability products.
For
additional analysis, participating companies were grouped into three segments
based on the number of EOI applications received in 2018. Those segments are
as follows:
Metrics & Staffing
On average, how many EOI applications does a full-time
underwriter handle per year?
On
average, a full-time underwriter handles 6,140 EOI applications per year.
By segment, low volume companies handle about 4,400 EOI applications
compared to high volume companies that handle nearly 7,600 EOI
applications per year.
On average, how many EOI applications did your company request in 2018?
For
companies able to provide this metric, a total of 2.4 million EOI
applications were requested in 2018. The number of requested applications
ranged from 5,143 (low volume) to over 700,000 (high volume). Of those
requested, 67% were returned. By segment, companies in the low volume segment
averaged a return rate of 75%, while the return rate for the medium and high
volume segments averaged 65% and 64%, respectively.
On average, how many EOI applications did your company receive in 2018?
More than
2.3 million EOI applications were received in 2018. This averages to
nearly 130,000 applications for all companies reporting this data.
Of your 2018 EOI applications received, what percentage were
ultimately approved, denied, closed (for reasons other than decline), or
pended/postponed.
On
average, 60% of the EOI applications received in 2018 were approved and 16%
were denied. By segment, high volume companies approved 65% and denied 14%,
compared to 54% approved and 17% denied for medium volume companies.
What was the average processing time for your EOI applications,
from date of original receipt to date of final decision (include approved,
denied and closed)?
Seventeen
of the 20 companies (85%) track the processing time for their EOI
applications. From the date of the original receipt to the date of the final
decision, EOI applications are processed in about 11 business days. Companies
in the low and medium volume segments averaged longer processing times at 11
days than companies in the high volume segment that averaged nine
business days.
Underwriting Resources & Challenges
What type of medical underwriting manual(s) does your company
use for group medical underwriting?
Eighteen
of the 20 companies (90%) use their reinsurer’s manual for group medical
underwriting and half use an internally developed manual. Eight of those companies
use both manuals.
“Other”
mentions include using a company’s own manual with consultation from its
reinsurer, and using a reinsurer’s manual in conjunction with a company’s
internal policies.
What are the top three challenges facing your group medical
underwriting department today?
Managing
volume during peak times continues to be the greatest challenge facing group
medical underwriting departments today. Technology deficiencies and achieving
expected turnaround times also continue to be problematic.
Application Details & Processes
Does your EOI application include a question and/or request
further details to address the following conditions?
Of the
conditions referenced in the questionnaire, almost all companies include a
question to address type 2 diabetes, coronary artery disease, cancer and
anxiety/depression on their EOI applications. The condition least likely to
appear on an EOI application is sleep apnea. However, although only nine
companies include a question about sleep apnea specifically, 15 request further
details; some companies include a “catch-all” question for applicants to
provide additional detail about conditions not specifically asked about.
If your EOI application includes a look-back period, do the
following conditions result in an automatic decline if within the
look-back period?
More than
half of the companies would automatically decline an applicant with a history
of type 2 diabetes mellitus or coronary artery disease, if within the
look-back period. Few companies would decline an applicant with a history of
anxiety/depression or sleep apnea.
What percentage of your 2018 EOI applications were submitted
using a short form and/or long form application?
Overall,
slightly more than half (53%) of the EOI applications were submitted using a
short form in 2018. Companies in the low volume segment had 40% of their EOI
applications submitted via a short form, compared to the high volume segment
that had 67% submitted using a short form.
Can your EOI application be submitted to your company via a
fillable PDF and/or web-based interface? In 2018, approximately what percentage
of your total EOI applications were submitted via a web-based interface?
The
majority of companies (70%) provide both a fillable PDF and web-based interface
for applicants or agents to submit EOI applications. On average, 53% of EOI
applications were submitted via web-based interface in 2018.
Automated Underwriting System
Does your EOI system have the ability to automatically approve
coverage without the review of a medical underwriter? Approximately how many of
your total EOI apps were processed through this system?
Eighty
percent of the companies have an EOI system that can automatically approve
coverage without a medical underwriter’s review; also known as straight through
processing (STP). Of the four companies that don’t have STP, only one
plans to develop the capability within 24 months.
For
companies that provided both the number of EOI applications received in 2018
and the number processed through their automated system, on average, 55% were
processed through their STP system.
What percentage of your total EOI apps had the following
outcomes?
Overall,
just under half of the EOI applications processed through an automated
underwriting system were either approved or referred to underwriting at 47% and
46%, respectively. For companies in the low volume segment, 66% of applications
needed a review from an underwriter compared to 26% for high volume companies.
Additionally, high volume companies approved about twice the EOI applications
than the low and medium volume segments at 33% and 29%, respectively.
For Group Life, what is your minimum benefit amount for
routinely requesting a Paramedical Exam at the specified age?
The
minimum benefit amount averaged over $400,000 for routinely requesting a
paramedical exam for applicants ages 20 to 40. For two companies, the
minimum benefit amount for those ages is $1 million.
For Group Life, what is your minimum benefit amount for
routinely requesting Blood and Urinalysis at the specified age?
The
minimum benefit amount averaged under $400,000 for applicants ages 20 to 40 and
about $200,000 for ages 60 to 70, for routinely requesting blood and
urinalysis. For ages 50 to 60, one company reported a higher benefit amount for
a blood test than for a urine test.
For Group Life, what is your minimum benefit amount for
routinely requesting an Electrocardiogram (EKG) at the specified age?
Although
fewer companies have a minimum benefit amount requirement for an electrocardiogram,
it averaged over $1 million for applicants ages 20 to 40 and
nearly $900,000 for age 50. For applicants age 50, two companies
reported a minimum benefit amount just over $1 million and one company
reported a benefit amount of $3 million for an EKG.
Download the PDF for a list of participating companies and
survey definitions.
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