There is often a lot of confusion and misunderstanding around what information, details and data you should share to insurance companies and brokers when looking for new quotes. Should you provide your current plan and rates? Should you provide your latest claims reports? Is it ok to share your group demographics? We find that there is a really broad spectrum of what companies will provide when quoting on new business, from those that provide all the information you request to those who just provide the bare minimum. In this article we are going to explore this in more detail and start by detailing how underwriters typically approach new business quotes, so you can get an understanding on why certain questions are asked.
When looking at new business, the underwriter will want to obtain a full picture of the group, so they can better understand the risk and set the plan rate accordingly. To start the process, most underwriters will want to know the following details:
Based on this initial information, they will most likely have follow up questions but this will start the process moving.
An underwriter will typically have two options when putting a quote together, they will have their “manual or book rates” and then if they have enough information they will use “experience underwriting”.
These are the rates that are based on their current book of business , and will take into consideration a number of different factors. Sometimes carriers that have a lot of cultural exchange business already, will have much more accurate book or manual rates, as it is based on their whole book of cultural exchange business. Carriers that do not have much cultural exchange business will rely on their rates from other pieces of business, such as their leisure travel market or business travel market. In this instance, relying on manual or book rates where they have little current cultural exchange business can lead to much higher rates.
In general, manual or book rates are much higher as the underwriting team is relying on other business they have to guide them, and the rates are not based on your specific experience.
When current insurance details, rates and claims data are shared, this gives the underwriter the opportunity to experience underwrite the plan based on the data. This can sometimes be much more accurate, as the rates will be set on your actual experience and participant usage. If you are looking to stay with an insurance company long term, and not move every few years, experience underwriting is the best way to handle this.
It is important to remember that no one group is the same. You could have two separate companies that both bring in 100 AuPairs into the USA each year, and one group has a plan that is priced at $2.50 per day and the other group has a plan priced at $1.90 per day. You cannot say that they should be priced the same, as there are unique intricacies within each plan that can cause one plan to be more expensive than another.
A few of the key reasons why plans differ:
Obviously if a plan differs in price, the first thing to look out for are the key benefit differences, do they have less out of pocket, are they covering more? The age is also a leading factor, as groups with older participants tend to have higher rates due to higher rates of claiming.
The last point is one that not many groups consider, participants claim differently depending on where they come from. In the example of the AuPairs, a participant from Brazil may be more inclined to seek medical treatment than a participant from South Korea. These cultural differences can impact a plan’s overall claims volume, and that is why you see differences between similar groups.
Withholding any information through the insurance process immediately puts any underwriter on alert. Underwriters are naturally cautious people, and will always err on the side of caution. If information is being withheld they will think the worst case scenario.The most commonly withheld pieces of information are:
If you do withhold your current plan and rates, you run the risk of not getting a proposal back that fits your needs. Plans and options can vary so much, that without providing any sort of guidance as to what your current plans look like, you could get a plan that is very different than you actually want. Coupled with that, withholding your current rate will lead the underwriters using their book rates. These are typically much higher, and if your group is larger in size, any size discounts will be thrown out the window as they will just rely on their trusted higher book rates.
Withholding your renewal action or claims report does not allow the underwriter to experience rate your plan. Any insurance company should be able to provide you with a claims report for the years you request. It should show total premium, total paid claims, any pending claims at a minimum and insurance companies can typically run these reports at a press of a button. There are reasons why some companies may not want to share this information, but it is your information and you have a right to see it — especially if they are requesting a rate increase, you will want to know why!
If you are providing your full claims report, you do not necessarily need to provide your upcoming renewal action, as the underwriter can use the data to underwrite the plan in their usual manner. They do not actually need to know your renewal, but it does help them through the process, especially if you are trying to get a lower increase.
Overall, withholding information through the insurance process is not advised and does not help you. There is a school of thought that all insurance is the same, and companies should just provide their best offer based on their plans, but hopefully after you have read this you will realize that this is not the case. If you look at life insurance, for example, the premiums for a life insurance plan are based on a number of different factors - the age of the applicant, full medical history, etc… Some insurance companies will not even provide life insurance without this information and if they do, the rates are typically not competitive and the policies are limited. The health insurance for your participants is no different, and you cannot expect insurance companies to provide competitive quotes without assisting and providing as much information as you can.
For future or current participants who are insured on our plans, you can view all the details about your plan through your Student Zone. You can find this information in your welcome email and insurance ID card. If you cannot find this, please contact us.Contact Us