Financial Underwriting - The Carrier`s Perspective

Report
AXA Equitable’s
Underwriting
Meets
AgencyONE
Strength through
Innovation
Karen Sweeney,
Chief Financial Underwriter
Kathy Fell, VP & Head of AXA’s
Brokerage Underwriting
Cat.# 144773 (2/13) For Financial Professional Use Only. Not for use with the general public.
agenda – financial due diligence
strength through innovation
•
•
•
•
2
Who We Are
What We Do
How We Add Value
How YOU can help US
For Financial Professional Use Only. Not for use with the general public.
above all else, we need to be good with numbers
some simple mental calisthenics to start our session
does anyone have…
who we are
five financial experts with over 75 years of
combined insurance experience
•
•
•
5
Develop financial solutions for complicated or unique
case designs such as Premium financing and trustowned coverage
Utilize their accomplished investigative skills to access
public records and Internet databases
Assist with in-house reviews that validate submitted
financials which may eliminate the need for additional
financial requirements
For Financial Professional Use Only. Not for use with the general public.
team structure
Mary Bates,
Head of Life
Underwriting
Michael Tunney,
Head of
Financial Due Diligence
Karen Sweeney
Chief Financial Underwriter
6
Anna Napoli
Assistant Manager
For Financial Professional Use Only. Not for use with the general public
Tabatha Johnson, C.P.A.
Chief Financial Underwriter
Mark Bishop
Legal Assistant
more on who we are – AXA Equitable’s unique position
•
•
•
7
“mature” unit embedded within the Underwriting area to provide guidance
regarding case designs, client information, EOLI issues
backgrounds include:
 Life Underwriting Experience
 Certified Public Accountant
 Certified Fraud Examiner
 Claims Adjudication
 Paralegals
work in concert with Underwriting Management and Advanced Markets to
ensure underwriters have information at their disposal to best assess the
cases presented to them
For Financial Professional Use Only. Not for use with the general public.
what we do - ultimate role
•
•
•
•
8
additional resource for underwriters to better understand
issues that are driving the sale of the policy
sounding board for underwriters to discuss items of concern
they have identified
identify trends in financial underwriting issues, and provide
additional training and education to help underwriters better
understand the financial presentation of the application
verify financial presentation is accurate
: allow our Underwriters to spend their time assessing risk
For Financial Professional Use Only. Not for use with the general public.
putting theory into action
•
getting to “YES”
•
determining premium paying ability
•
estimating net worth
•
legacy planning – thinking about future generations
•
key components for faster track
: allow our Underwriters to spend their time assessing risk
9
For Financial Professional Use Only. Not for use with the general public.
line: allow our Underwriters to spend their
case study #1 - things aren’t always what they seem
•
•
•
•
•
•
•
10
Female, age 49, non-smoker
Applying for $30 million, 10 year term policy
Purpose of insurance: key person and buy-sell
Founder and CEO of commodities trading
company
States annual income is $1,000,000+
Business Tax Returns, page 1, suggest
significant losses
How does the AXA Underwriter navigate through
this presentation?
For Financial Professional Use Only. Not for use with the general public.
first glance – 2010
: allow our
Underwriters to
spend their time
assessing risk
line: allow our
Underwriters
to spend their
11
For Financial Professional Use Only. Not for use with the general public.
second glance – 2011
: allow our
Underwriters to
spend their time
assessing risk
line: allow our
Underwriters
to spend their
12
For Financial Professional Use Only. Not for use with the general public.
the first clue – income had to be somewhere
: allow our
Underwriters to
spend their time
assessing risk
line: allow our
Underwriters
to spend their
13
For Financial Professional Use Only. Not for use with the general public.
the second clue – balance sheet and partners’ capital accounts
: allow our
Underwriters to
spend their time
assessing risk
line: allow our
Underwriters
to spend their
14
For Financial Professional Use Only. Not for use with the general public.
the deep dive
•
Schedule K-1
 did not receive any portion of the Guaranteed Payment to Partners
 received distributions of nearly $3.2 million in 2011
 net capital account totaled over $11 million
additional financial statements showed an additional, wholly owned
:allow
our Underwriters to spend their time assessing risk
subsidiary that contributed both annual income and increased equity
line: allow our Underwriters to spend their
Result: Financial Due Diligence communicated a comfort level for face
amount applied for to the underwriter
15
For Financial Professional Use Only. Not for use with the general public.
case study #2 – finding the money
•
•
•
•
•
•
•
•
16
Male, age 52, non-smoker
Applying for $25 million IUL
Purpose of insurance: family protection, income replacement and estate planning
Occupation: self-employed real estate development and management
In Force Coverage: $9,116,000 (not replacing)
Proposed Insured’s net worth: $52 million
Annual Income: $1,125,000
Premiums: nearly $670,000 first year; subsequent premiums nearly
$300,000 annually
For Financial Professional Use Only. Not for use with the general public.
the financial questionnaire
: allow our
Underwriters to
spend their time
assessing risk
line: allow our
Underwriters
to spend their
17
For Financial Professional Use Only. Not for use with the general public.
the tax return
: allow our
Underwriters to
spend their time
assessing risk
line: allow our
Underwriters
to spend their
18
For Financial Professional Use Only. Not for use with the general public.
putting the puzzle together
•
•
•
•
•
19
Financial Due Diligence used the tax returns as a resource to develop names of
business entities through which real estate would be owned by the proposed
insured
Financial Due Diligence subsequently verifies extensive real estate holdings
owned in various LLC names via public information
consumer debt of $2,600,000 all paid currently and without history of credit
delinquency suggests income well in excess of what the tax returns reflect
supporting Schedule K-1s show significant cash flows from business entity
distributions and significant partner capital account balances
Result: annual income and net worth as reported on the financial questionnaire
appear reasonable; concern regarding premium affordability addressed
For Financial Professional Use Only. Not for use with the general public.
estimating net worth
Two options:
Option A: 1040 tax return
20
For Financial Professional Use Only. Not for use with the general public.
estimating net worth of investment accounts
: allow our Underwriters to spend their time
assessing risk
line: allow our Underwriters to
spend their
21
For Financial Professional Use Only. Not for use with the general public.
option b: 4506 - T
Option B: Use of 4506 - T
22
For Financial Professional Use Only. Not for use with the general public.
estimating net worth with the 4506 - T
Wages and investment assets
23
For Financial Professional Use Only. Not for use with the general public.
estimating net worth with the 4506 - T
Business Interests
24
For Financial Professional Use Only. Not for use with the general public.
projected inheritance – financial due diligence role
projected inheritance
important
•
•
25
AXA Equitable
now financially
underwrites
cases based
on the
projected
inheritance of
the Insured
The assets
of one
generation
can justify life
insurance
coverage for
the next
1+1 = 2
Turn 1 sale into 2 (or more!)
Guidelines:
•
•
•
•
Generation 1 (G1) must be:
a) age 70 or older, or
b) under age 70 with evidence of a life expectancy under 5 years
Require confirmation that established estate planning is in place that
involves transfer of estate to the next generation
Verification of net worth of G1
An appreciation factor may be considered on a case-by-case basis
(possible 3-5% for max period of 10 years), subject to the structure of
the inheritance planning, details of assets to be inherited (value and
type of asset), and review by the Financial Due Diligence Team
For Financial Professional Use Only. Not for use with the general public.
confirmation guidelines
what is required to confirm established estate plan is in place
•
can be in the form of:



26
GE-00000
a copy of the Irrevocable Trust, if one has been executed
confirmation (from attorney or some appropriate third party,
not the Proposed Insured) verifying Inheritance to take place in the
next 5-10 years; or
a copy of Parent's or Bequeather's Will and Estate Planning
documentation
financial case study – projected inheritance
•
•
•
•
•
•
•
•
27
Male, age 45, non-smoker
Applying for $65 million IUL (AXA’s Jumbo Limit)
Purpose of insurance, estate planning, Sole heir to his 75-year old mother’s
estate
Beneficiary is an Irrevocable Life Insurance Trust for the Benefit of the Proposed
Insured’s Children, Grantor Mother
Proposed Insured’s individual net worth,
exclusive of future inheritance, is $20 million
Mortality calculation at the Proposed Insured’s
age 45, would qualify for a total line of $43
million
Bequeather/mother’s net worth is $28 million
Mortality calculation at mother’s age 75 qualifies
for $27 million which represents son’s possible
estate tax liability
For Financial Professional Use Only. Not for use with the general public.
financial case study – projected inheritance
the solution:
•
•
28
By adding the current projected death benefit need of
the Proposed Insured and the projected future
inheritance from the mother’s projected estate need,
AXA was able to justify the amount applied for: $65
million
Our competition would have allowed only $40 million
For Financial Professional Use Only. Not for use with the general public.
moving things along…faster track
value of anticipation, partnership, and communication
•
•
•
cover letters
secure complete financial information
review finances prior to submission to determine if complete financial picture
is being presented
• secure additional financial Info if it will be required
 If large % of Net Worth is in Real Estate, secure addresses
 If large % of Net Worth is in Oil/Gas Royalties, secure valuation information,
•
29
last royalty check, 1040s, etc.
include financial information with Informal Review Process
GE-00000
agenda
strength through innovation
•
•
•
•
30
Who We Are
Special Programs
Underwriting Niches
Marketing Resources
For Financial Professional Use Only. Not for use with the general public.
AXA Equitable’s most competitive strength
who we
are
31
For Financial Professional Use Only. Not for use with the general public.
who we are — underwriting teams
our underwriting teams
•
•
•
•
•
80+ Underwriters; average of 20+ years experience
Expertise in navigating the grey by taking a holistic
approach to underwriting each case
Understand the competitive nature of the business
Options oriented; solutions driven
Dedicated to building and maintaining relationships
our workflows
•
32
Maximize our strong experienced staff, with easy and
direct access by phone or email
For Financial Professional Use Only. Not for use with the general public.
Large Case
“Concierge Service”
and expert case design
General
Dedicated Relationship
Management for a
tailored response to
individual agency
needs
who we are
four medical directors, combined at three
sites, with a total of over 40 years experience
•
•
•
33
Committed to research and development of new medical
updates keeping our guidance cutting edge
All are Insurance Medicine Board Certified each with
unique focus and experience
Provide holistic training and educational opportunities
both internally and externally
For Financial Professional Use Only. Not for use with the general public.
underwriting programs
AXA Equitable retention and automatic limits
(standard or better risks – in millions)
Highlights:
1
2
3
• Large Retention
Capacity
• Strong
Reinsurance
Relationships
1 Lower limits apply to juvenile insurance
2 For policies with increasing amounts, i.e., policies with Return of Premium Death Benefit Rider (ROPR), the ultimate amount per the
illustration must be used for retention and automatic reinsurance calculations.
3 For ASUL products, death benefit is limited to our retention.
34
For Financial Professional Use Only. Not for use with the general public.
underwriting programs
important
Please contact
your Underwriter
or RVP for further
details.
predictive analytics “EasyUnderwriting” program
•
•
AXA is piloting a new underwriting process that uses
technology to analyze information application information.
This data helps determine the underwriting rate class and
opportunity for potential “Jet Issue”
Benefits:
•
•
•
•
35
Faster cycle time for cases that meet predefined criteria
Underwriting decisions, on average are made within 3
business days
Cases that fit criteria do not require exams and labs
An easy, enhanced customer experience
For Financial Professional Use Only. Not for use with the general public.
underwriting programs
good health credit program (GHCP)
Giving credit where credit is due!
Can a Proposed Insured with a demonstrated healthy lifestyle
get credits to improve his or her overall rating? YES!
In fact, eligible Standard cases can move to better than
Standard rates.
Factors considered include:
•
•
•
36
Favorable cardiovascular risk factors
Good preventative medical care
Lifestyle changes and improved health habits
For Financial Professional Use Only. Not for use with the general public.
underwriting programs
good health credit program
Unlike traditional limiting industry table shave programs,
AXA Equitable’ s GHCP allows credits for:
•
•
•
•
37
All Products
Face amount limits — up to available full retention:
$20 million individual or $25 million survivorship
Both lives on a survivorship policy
Cases rated up to Table D
For Financial Professional Use Only. Not for use with the general public.
underwriting niches and advantages
professional athletes, entertainers
and high profile individuals
38
Personally-Owned
Business/Team-Owned
PRODUCTS
All Term and Permanent
10-Year Level Term and ART
RETENTION
Full Retention
Full Retention
COMPENSATION
Regular Schedule
Levelized Schedule
TEAM LIMITS
N/A
No Limit
REINSURANCE
None
None
For Financial Professional Use Only. Not for use with the general public.
underwriting niches and advantages
preferred classification available
with personal history of cancer
Better than Standard offers can be considered on a case-bycase basis for some cancers with very favorable prognosis.
This would include:
•
•
•
•
•
39
Melanoma-in-situ (Clark’s level 1 melanoma), without
history of dysplastic nevi
Papillary or mixed (papillary-follicular) carcinoma of thyroid
Testicular seminoma
Carcinoma-in-situ or CIN/dysplasia of cervix
Carcinoma-in-situ of colon, without subsequent
adenomatous polyps
For Financial Professional Use Only. Not for use with the general public.
underwriting niches and advantages
favorable factors for consideration of better
than standard with personal history of cancer
•
•
•
•
•
•
40
Non-smoker
Early stage and early grade of tumor (in situ or stage I) at
time of diagnosis and treatment
Surgical treatment only (no radiation or chemotherapy)
Current age 50 and up
10 or more years since cure of cancer
Excellent follow-up and routine preventive health care
For Financial Professional Use Only. Not for use with the general public.
underwriting niches and advantages
prostate cancer
•
•
•
41
Early stage, low grade prostate cancers in older
males are often Standard
At ages 60 and up, non-apical, organ confined
disease, Gleason 8 and lower, treated by
prostatectomy, with favorable PSA’s for 5 years may qualify for Standard!
Age 66 and up, even with a PSA rise, AXA can
offer on selected cases of biochemical relapse of
Prostate Cancer
For Financial Professional Use Only. Not for use with the general public.
New!
Transient increases of
PSA that return to
acceptable ranges on
their own without any
form of treatment will
not be considered a
relapse
medical case study — prostate cancer
•
•
•
•
•
•
•
•
•
Male, age 69
IUL, $3 million
No coverage in force or applied for
Prostatectomy at age 62 for adenocarcinoma
of the prostate, Gleason score 7
Pre-surgery PSA (8)
Annual follow-ups with PSA values <(0.1)
18 months ago, PSA rose to (0.2). At six-month
recheck PSA was (0.3).
With no further intervention, PSA dropped back to (0.1) one year ago
Insurance blood profile PSA is stable at (0.1)
Otherwise healthy individual taking no medications, normal blood pressures, lipids
and family history.
AXA offers Standard
42
For Financial Professional Use Only. Not for use with the general public.
underwriting niches and advantages
MGUS
Monoclonal Gammopathy of Undetermined Significance
is a condition in which a paraprotein (IgG, IgM and IgA ) is
elevated in the blood.
important
Lower
identified risk
factors result in
lower ratings!
43
•
•
•
Occurs in 5% of those over age 70
AXA’s ability to provide more favorable offers has improved
All cases of Multiple Myeloma are preceded by MGUS, but
not all cases of MGUS will progress to Multiple Myeloma
For Financial Professional Use Only. Not for use with the general public.
medical case study - MGUS
Face Amount—$2,500,000, UL
Male age 66, Non-smoker
Otherwise healthy individual taking no medications,
normal blood pressures, lipids and family history
Diagnosed with MGUS a year ago when visiting his MD
for a routine physical, he has remained asymptomatic.
Extensive lab work included:
• Serum M-protein level < 3g/dl All IgG, IgM and IgA levels within acceptable ranges
• Bone marrow plasma cells were < 10%
• All IgG, IgM and IgA levels within acceptable ranges
• Bone marrow plasma cells were < 10%
• Urine M-protein < 1gm/day
• Physical exam favorable with absence of organ or tissue impairment related to
myeloma
44
For Financial Professional Use Only. Not for use with the general public.
medical case study — MGUS
Due to recent Medical Manual updates, AXA was able
to give this client the most favorable rating of Standard
with a Flat Extra of $2.00 per thousand.
Prior to AXA’s MD Research and Manual updates, the
Flat Extra could have been as high as $7.00 per
thousand.
AXA offers Standard w/Flat Extra $2.00/1000
45
For Financial Professional Use Only. Not for use with the general public.
underwriting niches and advantages
rheumatoid arthritis
Rheumatoid Arthritis (RA) is an autoimmune form of arthritis that
causes pain, swelling, stiffness and loss of function in the joints.
Can also affect eyes, mouth and lungs.
•
Lower identified
risk factors result
in lower ratings!
•
•
46
Favorable cases are those in remission for more than 1 year,
could now be Standard and eligible for Standard Plus via the
Good Health Credit Program
Will still consider someone on medication for better than
standard if they meet all ACR Criteria
Use of disease modifying Anti-Rheumatic drugs no longer
considered an adverse factor in treatment of RA, leading to
more aggressive offers.
For Financial Professional Use Only. Not for use with the general public.
medical case study - rheumatoid arthritis
Face amount: $5,000,000, IUL — Female, age 49, Nonsmoker
Rheumatoid arthritis, diagnosed at age 46. Past treatment for
depression, no longer on RX.
•
•
•
•
2009-Minimal joint pain in hands and feet, no morning
stiffness or swelling, started Methotrexate
2010-significant discomfort in left ankle. Rx Enbrel and Prednisone taper (10
mg/day for 3 days, then drop to 5 mg/day for 3 days, then discontinue)
2011-RA stable, no joint swelling, no pain other than shoulders, but appears to
be due to muscle strain, not RA.
2012- still taking Enbrel and Methotrexate, no swelling, no morning stiffness, no
joint pain
Satisfies all ACR criteria for remission for over 1 year. No additional debits for
current or past medication usage Good Health Credits available for Cholesterol, No
tobacco usage, Family History, Build, Blood Pressure, regular follow-up with MD.
47
For Financial Professional Use Only. Not for use with the general public.
medical case study — rheumatoid arthritis
Rheumatoid Arthritis in remission, even while on
maintenance medications, including multiple Disease
Modifying Anti-Rheumatic Drugs can qualify for better
than Standard rates.
AXA offers Standard Plus
48
For Financial Professional Use Only. Not for use with the general public.
underwriting niches and advantages
EBCT results
important
AXA looks at the whole case giving credit for favorable routine
care and control of blood pressure and cholesterol and other
coronary risk factors:
•
•
•
49
Percentile 0 – 74: all Preferred levels available
Percentile 75 – 89: can consider for Preferred or Standard
Plus with normal imaging stress test, favorable risk factors,
etc.
Percentile 90+: Standard is best offer, with normal imaging
stress test, favorable risk factors, etc.
For Financial Professional Use Only. Not for use with the general public.
A cardiac
catheterization
report remains
the gold
standard
if done as part
of the cardiac
workup
medical case study - EBCT
Face Amount: $5,000,000, VUL
Male age 65, Nonsmoker
•
•
•
•
Treated Hyperlipidemia, Cholesterol ratio 4.5
Blood Pressure 120/80
EBCT score of 70th percentile
All other risk factors favorable
AXA offers Preferred Elite
50
For Financial Professional Use Only. Not for use with the general public.
underwriting niches and advantages
sleep apnea
Sleep Apnea is a sleep disorder characterized by abnormal
pauses in breathing or instances of abnormally low breathing
during sleep.
•
All Preferred classes are available with mild sleep apnea
(AHI less than 20, O2 saturation > 85%)
All Preferred classes available on cases treated with
effective CPAP therapy, with demonstrated compliance
51
For Financial Professional Use Only. Not for use with the general public.
underwriting niches and advantages
barrett’s esophagus
Usually related to Chronic GERD. Treatment: Gastric suppression
with proton pump inhibitor (PPI)
•
•
•
•
•
•
52
Complications: Low grade dysplasia
High-grade dysplasia
Esophageal adenocarcinoma
Higher incidence in males than females. Over age 45 is highest
risk group.
More cases can qualify for Standard and upgrade to Standard
Plus via the Good Health Credit Program
Resolution on endoscopy or biopsy may qualify for better offers
For Financial Professional Use Only. Not for use with the general public.
medical case study – barrett’s esophagus
Male age 55, 5’10”, 200 lbs.
Quit smoking 18 years ago
$6,000,000, VUL and Term 20 coverage
Family History: Father alive - age 77,
Mother died at 71 of colon cancer
•
•
•
•
•
Treated Hyperlipidemia, Cholesterol ratio 3.5
Blood Pressure 120/80
All other risk factors favorable
Referred to gastroenterologist 3 years ago with worsening reflux symptoms not
relieved by medication. An endoscopy was performed revealing Barrett’s
Esophagus with no dysplasia.
Follow up endoscopy this year confirmed Barrett’s Esophagus with no dysplasia
AXA offers Standard Plus
53
For Financial Professional Use Only. Not for use with the general public.
underwriting niches and advantages
important
Cases can be
considered for all
levels of
Preferred after
two years based
on the merit of the
improvement,
stability of the
treatment, and its
effects on all
associated
impairments
54
bariatric surgery
Significant, sustained weight loss over 2 years.
Look for improvement in:
•
•
•
hypertension
diabetes
diet and exercise
For Financial Professional Use Only. Not for use with the general public.
underwriting niches and advantages
important
Cases can be
considered
for all levels
of Preferred
with 100 or
more solo
hours and
flying between
26 and 150
hours a year
55
aviation
•
•
AXA Equitable offers Private Pilots the opportunity to qualify
for all Preferred Classes for risks evaluated up to
$3.50/1000 for their aviation activities
Licensed private pilots with 100 or more solo hours and
flying between 26 and 150 hours a year incur no extra
premium assessment
For Financial Professional Use Only. Not for use with the general public.
AXA Equitable
important
Here is what
sets us apart
from the
competition…
56
what sets AXA apart?
GHCP credit
program
marketing
support
high
retention
medical
directors
underwriting
expertise
financial
team
For Financial Professional Use Only. Not for use with the general public.
underwriting marketing support
Underwriting
Case Studies
Marketing Flyers
www.axa-equitable.com
My Business > Underwriting
Brainsharks
podcasts
57
For Financial Professional Use Only. Not for use with the general public.
underwriting
campaigns
thank you
Please visit www.axa-equitable.com
for more information
58
For Financial Professional Use Only. Not for use with the general public.
G30859
disclosure
This seminar
is for
informational
uses only
All guarantees are based on the claims-paying ability of AXA Equitable.
This material should not be considered tax or legal advice. Clients
should consult their own tax and legal advisors regarding their particular
circumstances.
© 2013 AXA Equitable Life Insurance Company. All rights reserved.
1290 Avenue of the Americas, New York, NY 10104, (212) 554-1234.
59
For Financial Professional Use Only. Not for use with the general public.

similar documents