- Background
Traditional underwriting and issue processes have been an impediment to profitable sales in the mid–market., due to slow time to issue and high costs. Most mid–market companies use rapid issue processes which include very limited underwriting–but this often leads to unmanageable risk and forces carriers to limit face to very small amounts.
Nowadays, companies have more effective underwriting tools available electronically, which allow them to perform fairly comprehensive risk screening and to issue a policy at the point–of–sale. However, the level of effectiveness of these tools, used in combination as the sole screening tools, has not been studied.
- Purpose
This is a two–phase project with the ultimate purpose of determining the mortality selection of risks efficacy of an electronic personal history interview (drill–down application) coupled with e–data (MIB, Rx, MVR) vs. non–med underwritten business and medically underwritten business. The study will also examine the utility of each of these elements (the app, MIB, Rx and MVR), if possible.
In Phase I of the study, a company survey will be performed to determine practices of life insurers utilizing these electronic underwriting tools as well as the type and amount of data that would be available for further study. The results of Phase I will be used to investigate the feasibility of Phase II, which studies how mortality risk selection outcomes utilizing electronic underwriting tools (e–application with a drill down personal history interview coupled with MIB, MVR, and/or Rx e–data) compare qualitatively to that using more traditional underwriting methods. Phase I results will be used to develop and finalize the scope of Phase II.
While this RFP addresses Phase I only, the researcher(s) chosen for this RFP will also assist with drafting the follow–up Phase II RFP and will be eligible to bid on Phase II.
- Research Objective
To design and conduct a survey of selected insurers that are known to be utilizing electronic underwriting tools (e–application with an electronic personal history interview, coupled with MIB, Rx, and/or MVR). The information we are seeking at a minimum includes:
- Companies' objectives in utilizing these e–underwriting tools
- What types of distribution they are using these with
- The market(s) companies are targeting with these tools
- The length of time companies have been using these tools
- The amount of business companies are writing through the use of these tools.
- Companies' requirements/restrictions in utilizing the tools (i.e. How are the e–underwriting tools being applied for a product type/market?)
- Type of company data available for an intercompany mortality study
- Has the company performed internal studies on mortality selection of risks efficacy, and would the company be willing to share this data and/or experience results?
After the survey is complete, follow–up calls to survey participants to gain additional information may be necessary.
The researcher(s) will prepare a report summarizing the findings, analyzing the results, and recommending the areas in which to pursue the follow–up study. Finally, the researcher(s) will assist with drafting the RFP for Phase II of the project.
It is expected that the researcher(s) will work closely with a Project Oversight Group (POG) in finalizing the information to be collected, survey questionnaire, report of survey results, and/or Phase II RFP. The researcher(s) will also provide the POG with periodic progress reports. Members of this group will be available to provide feedback and guidance to the researcher(s) as needed.
In addition, the researcher(s) is expected to contact e–underwriting software vendors to gain information to help in the design of the company survey as well as the names of insurers to contact to participate in this project.
A relatively short term project is envisioned as findings are targeted to be presented at the SOA's Annual Meeting in mid–October.
- Proposal
To facilitate the evaluation of proposals, the following information should be submitted:
- Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education, and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
- An outline of the approach to be used, emphasizing issues that require special consideration. Details should be given regarding the manner in which appropriate published material will be identified, search techniques to be used, collateral material to be consulted, and possible limitations of the review and analysis.
- Cost estimates for the research, including computer time, salaries, report preparation, research costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included.
Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.
- A schedule for completion of the research, identifying key dates or time frames for research completion and report submission. A relatively short term project is envisioned.
- Ideas regarding the form and distribution of the final report, both for immediate release and for permanent reference (e.g., submission to North American Actuarial Journal or other refereed publication, SOA Monograph Series, CD ROM).
- Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.
- Selection Process
The SOA's Marketing & Distribution Section Council (MAD) is responsible for the selection of the proposal to be funded. Input from other knowledgeable individuals also may be sought, but MAD will make the final decision. The SOA's Research Actuary will provide staff actuarial support. A Project Oversight Group (POG) will be appointed by MAD to oversee the project upon selection of the proposal.
- Questions
Any questions regarding this RFP should be directed by fax or e–mail to: Ronora Stryker, SOA Research Actuary, fax: 847.273.8514; e–mail: rstryker@soa.org.
- Notification of Intention to Submit Proposal
If you intend to submit a proposal, please send written notification by July 24, 2009 to Jan Schuh, SOA Research Administrator, by e–mail (jschuh@soa.org), fax (847.273.8556).
- Submission of Proposal
Please e–mail a copy of the proposal to: Jan Schuh at jschuh@soa.org.
Proposals must be received no later than July 31, 2009. It is anticipated that all researchers who have submitted proposals will be informed of the status of their proposal no later than August 30, 2009.
Note: Proposals are considered confidential and proprietary.
- Conditions
The Society of Actuaries reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available to proceed. The Society of Actuaries also reserves the right to redirect the project as is deemed advisable.
The Society of Actuaries intends to copyright and publish the results of this research. The research will be considered work–for–hire and all rights thereto belong to the Society of Actuaries. However, appropriate credit will be given to the researcher(s).