The Brokerage General Agency: Your Partner in Technology, Knowledge and Carrier Relationships in Selling Life Insurance

The Brokerage General Agency:

Your Partner in Technology, Knowledge and Carrier Relationships in Selling Life Insurance

In today’s world of cumbersome illustrations, difficult applications, confusing contracting and varied state regulations, the typical independent Life Producer may feel that their best practice is to avoid anything more complex than recommending the most basic coverage to only your most healthy “appearing” running in the other direction. With the help of a brokerage general agency and their technology, selling life insurance to the most challenging client can be a surprisingly effortless and profitable process.

First of all, you should know that a BGA operates as a wholesale insurance broker with the authority to accept and place applications from (and often appoint) independent agents on behalf of an insurance carrier. They generally provide underwriting and administrative services, such as policy issue, on behalf of the insurers they represent.

Typically, BGA’s can market coverage and services, for which specialized expertise is required to underwrite policies. They benefit both agents and insurers because such expertise is not always available and would be more costly to develop on an in-house basis.

Start to Finish

The most difficult part about writing life insurance today is asking your client the question, “Do you need life insurance?”

Once they have answered the question your work is virtually done. I know it sounds too good to be true, but with the tools and technology now readily available, you sit back, relax and let the experts directly help you. Brokerage General Agencies can basically be your own backoffice with their support limited only by your decision to use them to their potential. Their primary function is to provide you with an efficient, cost effective, and profitable way of processing any life insurance challenges and cases that you choose to allow them to assist you in placing.

Customer Service: Provides front line customer service. Answers calls and emails from insurance carriers, replies to your pending status inquiries and works case changes and case requirements.

New Business: Processes new application entry, scrubbing for proper forms, missing information, signatures and requirement ordering of Paramed exams and attending physician statements.

Requirement Processing: Enters all application data including missing and additional requirements received after receipt of the initial application

Agent Licensing: Handles all agent and agency carrier-contracting matters for agent’s that will be writing business through the BGA.

From start to finish your BGA will use their internal and external resources to help you place the case. Not only do they help on the initial sale by providing you with comprehensive quotes, but they will also assign a case manager to process your cases and service your daily needs. In addition, they routinely submit any licensing enrollment needed on your behalf. Using a functional approach, where major tasks are assigned to dedicated staff members, they can improve efficiency and develop true expertise in each area of business processing. This means you have a team of experts working for you, making even a novice broker look like a pro.

A New Approach

As we all know, we have a world of information at our fingertips. The Internet has changed the insurance industry dramatically. Many of the insurer’s processes, such as underwriting and claims, have all been streamlined with this wonderful tool. Life insurance applications are no different.

It wasn’t so long ago a life insurance application would consist of many pages and would often take hours to complete. Scheduling a time to meet with your client in-person, travel times, mail times and obtaining client signatures could potentially add weeks to the application process. However, many carriers are offering a new approach with use of on-line and abbreviated one page application programs.Now the agent can obtain some basic information from the insured over the phone, in some cases with no signature required. This can save an agent time and money.

BGA’s are using these new and efficient practices to add value to their relationship with the independent agent by electronically submitting new business applications to the carrier. After an agent has obtained this basic information, the BGA will submit the request for insurance coverage (also known as a Quick Request, a Pre-Application or a Tele-App). A designated representative from the insurance carrier will contact your client for a confidential telephone interview. During this application interview they will be asked a number of detailed questions to help determine their eligibility for life insurance. In addition to routine questions (name, address, social security number, occupation, etc.), your client will be asked several questions about their medical history. Soon the agent will receive the decision and the policy will arrive.

Here is the kicker, no loss of commission. This is a free service to the agent. You will receive the exact same amount of commission if you completed the long application process yourself. Yet you still receive the same personalized underwriting and case management information.

Staying a Step Ahead

Basic electronic communication has come quite a long way since its introduction, yet it is still used for many of the same reasons. In spite of some its social disadvantages, e-mail has essentially evolved into a fast and efficient method for an agent to process new business applications. Yet despite all your efforts to produce life business the applications being sent to your BGA still take days process, creating a bottleneck in your production.

In efforts to not only stay a step ahead of the competition but also reduce costs in the long run, many managing general agencies are utilizing more efficient ways to process your business. Although e-mail has become an increasingly popular way to do business BGA’s know that they need to have not only a personal relationship with their agents, but also an electronic one.

There are lots of agents who still want to do business the old- fashioned way. In those instances we are able to utilize our in-house technology, so when agents do call we are able to find the information they need, quickly. By using technology to leverage our resources, we are a little more prepared when they call; they know who to call and who to speak with.

If you have the ability to get the most accurate answer or get information quicker, it is going to be more cost-effective not only for the agent but the BGA as well.

They have had no choice but to evolve to meet the needs of the agents that are finally embracing technology. Without these changes within the industry you become stifled with age-old traditions.

For example, we use a credited in-house data management system. With the case management system accepting case updates in “real-time” we are able to track each case and communicate with our agents because the information managed by our system is kept separate from other producers. When applications are submitted through our office the new business is entered in our system immediately. Each application, piece of correspondence, form, underwriting requirement, initial premium payment, and delivery requirement received by our business service center is entered into the system and imaged the day we receive it.” Through the use of this type of technology, we can forward fully complete paperwork and medical requirements to any of our group of the carriers. Documents received by the carriers can now be reviewed as soon as they are received thus virtually eliminating delays getting information from one point to another.

Innovation is absolutely vital to how a managing general agency operates, providing independent agents with the edge over their adversaries. An BGA must maintain an unmatched commitment to help its current and potential agents gain a competitive edge by providing a new approach to technology, tools, information, and customer service. Staying one step ahead is what this is all about. This is where a managing general agency can make a real difference.

Impaired Risk – A Human Touch

While competition has always existed between insurance carriers, new underwriting challenges have created an increased rivalry among life insurance professionals with the primary goal of placing a difficult case. In the current economic environment, life insurers and independent producers are looking for more premiums. This makes the impaired risk market very appealing to some carriers and most producers.

Even the most experienced agent may come across a case that he may be unable to place with his primary company. As a rule, the most BGAs often include members on staff that have an expertise in specialized underwriting. This is important when attempting to obtain a competitive offer on your impaired risk case. Your BGA’s competent impaired risk underwriter can be the difference between walking away empty-handed, and walking away with a commission check.

An agent can find consolation in how technology has drastically transformed and improved the way their business is conducted. There is now the technology in place to automate a large part of the underwriting process. In some cases, a computer can be programmed to interpret complex data better than a human. So when it comes to impaired risk underwriting, why use 20th century procedures when we have 21stcentury technology at our disposal?

Many insurance companies now allow BGA’s to submit informal inquiries for impaired risk electronically with turnaround times often within 24 hours. There may be some concern that with all the automation being provided by insurance carriers that your impaired risk case will suffer due to the loss of that personal relationship between the BGA and the underwriter. In reality, this type of technology is just another tool a managing general agency can utilize. There will always be a need for a human touch. “Being able to submit informals online or by email simply means I can process more inquiries from agents. Yet after ten years of evaluating impaired risk cases there is nothing more valuable a tool than being able to pick up the phone and speak to that underwriter directly.”

The key to success in the impaired risk life market is understanding the particular underwriting niches and “sweet spots” for specific insurers and having a good relationship with the underwriters at the companies they deal with. An insurer will typically fall into one of three categories: those with underwriting guidelines who will not deviate from their manual; those that will make minor deviations from their underwriting criteria; and those carriers which have an aggressive and flexible approach to their underwriting. Only through the relationships that a managing general agency has made over the years will they know which category a particular companies fall into. Impaired risk life underwriting is constantly changing. Your BGA will expend a lot of effort to stay on top of all carriers and their change in focus on impaired risk criteria at any given time.

If you know a client has a particular impairment, the BGA will ask you for a medical questionnaire specific to that impairment. The answers provided on the questionnaire lets the impaired risk individual ask the right questions of the underwriters up front before you even collect an application. After this process, you’ll be able to give the client an idea of the range of possible outcomes and take a formal application for the insurance company that looks most likely to make the most competitive offer.
 
It has become increasingly apparent that the sale of this case may very well depend on the managing agency relationship with your insurance carrier’s underwriters. This is an area that cannot be overlooked, as it may be the sole opportunity for an agent to bridge the gap with his client.
 
Today

I hope that this view of the services and support available from a Brokerage General Agency will make you feel comfortable with their expertise and specialized tools. The primary goal for your BGA should be to remain relevant and be flexible to adapt and adopt those new tools that will keep your support as timely as possible. These tools now have expanded far beyond simple product illustrations to include continual online website updates and now…social networking sites, such as appearing on FaceBook, Linked-In and Twitter. Wemustprovide today’s Life Producers with a 24/7 capability to receive the level support they need when theywant it. After all, more than ever before, our job remains to make you look at your very best and operate for your clients on the most efficient and profitable basis possible.

Gary S. Dworkin, CLU, RHU is the Presidentof DAI with offices in NH and Floridacan.  Dworkin Associates, Inc. (DAI) can be found online at www.dworkin.com as well as reached by phone at (800) 777-0061 and by Email at dai@dworkin.com.

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