Gen Re is pleased to share results from its U.S. Group Medical Evidence of Insurability (EOI) Underwriting Survey. The report focuses on what staff companies provide to process EOI applications as well as the methods used to process them. Twenty-three companies participated, and all but one reported that they track EOI data for their Group Term Life, Short Term Disability and Long Term Disability products. (List of participating companies, as well as definitions used in the survey, is in the PDF.)

For additional analysis, participating companies were grouped into three segments based on the number of EOI applications received in 2022. Those segments are as follows:

On average, how many EOI applications did your company request and receive in 2022?

Less than half of the participating companies track the number of EOI applications requested. For companies able to provide this metric, a total of 1.6 million EOI applications were requested in 2022. The number of requested applications ranged from 7 (low volume) to over 948,000 (high volume). Of those requested, 47% were returned. By segment, companies in the low volume segment averaged a return rate of 52%, while the return rate for the medium and high volume segments averaged 49% and 45%, respectively.

Over 2.6 million EOI applications were received in 2022. This averages to 116,000 applications for all companies reporting this data.

Of your 2022 EOI applications received, what percentage were ultimately approved, denied/postponed, withdrawn by applicant, or closed due to non-receipt of requirements?

On average, 66% of the EOI applications received in 2022 were approved and 17% were denied/postponed. By segment, high volume companies approved 74% and denied/postponed 19%, compared to a 55% approval rate and a 14% denial rate for medium volume companies.

What was the average processing time for your EOI applications, from date of original receipt to date of final decision?

Twenty-one of the 23 companies (91%) 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 15 business days. Companies in the low volume segment averaged the shortest processing time at 13 days followed by the medium volume segment at 15 days and the high volume segment at 17 days.

How many of the following internal and external resources support your medical underwriting function?

On average, participating companies have seven internal and one external year-round full-time underwriters who support their medical underwriting function during the off-peak season. An average of four additional internal and three additional external temporary underwriters are added during peak season. Only six of the participating companies reported having internal physicians on staff, and one company reported having nurses on staff.

What type of medical underwriting manual(s) does your company use for group medical underwriting?

Eighteen of the 23 companies (78%) use their reinsurer’s manual for group medical underwriting and about two-thirds (65%) use an internally developed manual. Eight of those companies use both manuals.

Of the companies who use an internally developed manual, 9% report incorporating reinsurer modifications. Thirty-five percent of companies use a reinsurer’s manual in conjunction with their own internal modifications.

What are the top five 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. Inefficient underwriting systems, technology deficiencies, updating or developing applications for improved underwriting risk selection and to meet marketing needs are also top challenges.

Does your EOI application include a question to address the following conditions?

Of the conditions referenced in the questionnaire, almost all companies include a question to address heart attack, cancer, hypertension, type 2 diabetes mellitus, and/or depression on their EOI applications. The condition least likely to appear on an EOI application is sleep apnea.

For the following conditions, does your EOI application include a look-back period? For “yes” answers within the look-back period what is the outcome?

Two-thirds (65%) of companies would decline an applicant with a history of heart attack, if within the look-back period. Few companies would decline an applicant with a history of depression, hypertension or sleep apnea.

What percentage of your 2022 EOI applications were submitted using a short form and/or long form application?

Overall, just over half (51%) of the EOI applications were submitted using a short form in 2022. Only four companies, all from the high volume segment, processed both short and long form applications in 2022. Companies in the low volume segment received 29% of their EOI applications via a short form, compared to the high volume segment which had 66% of EOI applications submitted using a short form.

The most common reasons for requesting a short form versus a long form are the size of group, the SIC code/industry profile, and requests from marketing. Other reasons include claims experience, the paramedical process, and association specific requests.

What percentage of your EOI applications were submitted to your company via paper, fillable PDF form, web-based interface, or web-based interface with reflexive questions?

On average, 48% of EOI applications were submitted via web-based interface in 2022. An additional 17% of EOI applications were submitted via web-based interface which included reflexive questions.

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-three percent of participating 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, two plan to develop the capability within 24 months.

Of the 19 companies with an automated underwriting system, 15 developed it in-house, four purchased it from an outside vendor, with two then modifying it internally.

For companies that provided both the number of EOI applications received in 2022 and the number processed through their automated system, on average, 60% were processed through their STP system. Low and medium volume companies processed about half (53% and 51% respectively) of their EOI applications through their STP system, while high volume companies processed 72% through STP.

What percentage of your total EOI apps had the following outcomes?

Forty percent of EOI applications processed through an automated underwriting system were approved. Nine percent were declined or rejected, while 51% were referred to underwriting. For companies in the low volume segment, 61% of applications needed a review from an underwriter compared to 29% for high volume companies. Additionally, high volume companies approved about twice the EOI applications than the low and medium volume segments at 26% and 28%, respectively.

What is your minimum face amount for routinely requesting a urinalysis at the specified age?

The minimum benefit amount averaged over $660,000 for routinely requesting a urinalysis for applicants ages 23 to 33. For one company, the minimum benefit amount across all ages is $2 million.

What is your minimum face amount for routinely requesting blood at the specified age?

The minimum benefit amount averaged over $475,000 for routinely requesting blood for applicants ages 23 to 43. For one company, the minimum benefit amount across all ages is $2 million.

What is your minimum face amount for routinely requesting a telephone inspection at the specified age?

For telephone inspection, one company reported that they use the same minimum benefit amount regardless of the applicant’s age. Five companies reported that, for certain ages, a telephone inspection is never routinely requested, but can be required for cause.

What is your minimum face amount for routinely requesting a paramedical exam at the specified age?

The minimum benefit amount averaged over $584,000 for routinely requesting a paramedical exam for applicants ages 23 to 33. For one company, the minimum benefit amount across all ages is $2 million.

What is your minimum face amount for routinely requesting an EKG at the specified age?

The minimum benefit amount averaged over $660,000 for routinely requesting an EKG for applicants ages 23 to 33.

What is your minimum face amount for routinely requesting a NT-proBNP at the specified age?

The minimum benefit amount averaged over $750,000 for routinely requesting a NT-proBNP for applicants ages 23 to 43. For one company, the minimum benefit amount across all ages is $2 million.

What is your minimum face amount for routinely requesting an attending physician’s statement at the specified age?

For applicants age 33, the minimum benefit amount averaged over $830,000 for routinely requesting an attending physician’s statement. One company reported a minimum benefit amount for age 73 of $1 million.

If you have any questions about our summary report, please reach out to me – or let me know if you'd like to participate in next year’s industry survey!