I have been part of many panels before many an audience over my four decades in the life and health insurance business. Usually a panelist is constrained from being controversial or opinionated by the ground rules laid down by either the moderator or the organization running the event. Traditionally from my recollections there have been very few meetings of underwriters where the panel is controversial, meaningful fun and leaves the audience with a message to think about.
In 1994 George Brennan, one of a large crop of Canadian iconic underwriters who played a large role in all associations, put together a great panel (personally speaking and from memories of audience feedback) that really got the juices flowing and left many a valid point to ponder for the audience. George let the four panelists do their own thing and he did not encumber the spoken word or the venom so playfully thrown around.
The other notable feature of the panel presentation was the fact it was and is timeless really. The issues raised remain to a large degree although items like insurers selling insurance in shopping malls as rates plummeted are over. Also the battle to reduce requirements was won over a slow and hopefully methodical period.
I believe it is a good read for today's risk takers to understand how much has changed in 18 years but at the same time how little has changed, especially in terms of underwriting stature and relations with producers, advisors, marketeers and perhaps even management.
It is long but a quick speed read!
Institute of Home Office Underwriters — 1994 Annual General Meeting
"Resolved: Underwriters Must Be Increasingly Prudent In Their Decisions If Future Mortality And Profitability Goals Are To Be Met"
The Third Session of the Administrative Management Session of the 58th Annual Meeting of the Institute of Home Office Underwriters convened in the Grand Ballroom 7 of the Marriott World Center Hotel, Orlando, Florida, Tuesday morning, November 8, 1994, and was called to order at 11:00 o'clock a.m. by Mr. George Brennan.
MR. GEORGE BRENNAN: Good morning, everyone. If you missed the First Session, my name is George Brennan, and it's my pleasure to welcome you to the final session of the Administrative Management Program. For our last session we are going to do something a little different. We are going to have a debate, and the resolution we will be debating is, "Resolved: Underwriters Must be Increasingly Prudent in Their Decisions If Future Mortality and Profitability Goals are to be Met."
Now, two of our panel members this morning will argue in favor of this resolution, and the other two will oppose it and will present arguments that we've become rather risk averse in our zeal to increase profits.
Now, the format we will be following is that both sides will present their opening arguments. Each individual will have ten minutes and only ten minutes. The two panel members arguing in favor will go first, followed by the two opposing. Following that, we will have a rebuttal from each side, five minutes each, and this time in reverse order. Opposing first, in favor second. And finally, we'll have a brief summation from each side summarizing their argument.
Now allow me to introduce our debaters. First, arguing in favor of the resolution and on my immediate right is Ross Morton. Ross wears many hats, but his major hat is that he is executive vice president of Intercedent Actuaries and Consultants Limited. That's a relatively new role for Ross. He was previously reassurance vice president at Manulife Financial. Ross is a frequent speaker and has many accomplishments, including being past chairman of the CIU and past chairman of the Canadian Reassurance Conference.
Also arguing in favor of the resolution and sitting next to Ross is Jerry Tamura. Jerry is vice president, Administrative Services, London Pacific Life and Annuity Company. He holds both FLMI and FALU designations. He also has many accomplishments. He's past president of the Western Home Office Underwriters Association and a past Executive Committee member of the Institute.
Sitting next to Jerry and arguing against the resolution is Arlette Mooney. Arlette is the director of underwriting for Metropolitan Life. She holds her FLMI designation and she has an MBA degree from New York University. She recently completed a two-year term on the Executive Council of HOLLA.
And finally, on my far right, and also arguing against the resolution is Mitchell Schepps. Mitchell is assistant vice president and regional marketing director for Cologne Life Reinsurance Company. Previously he was an actuarial assistant involved in reinsurance pricing at Cologne. Mitchell earned his bachelor of science degree in mathematics from the State University of New York at Albany.
That completes the introductions, and I'll now turn it over to Ross, who will begin the debate. So have fun.
MR. ROSS A. MORTON
Somewhere I've got 27 slides buried in here. Here we go. The timer's started. I've used ten seconds. George originally told me I had 30 minutes, so I had 30 slides. George edited some of my slides out, and I'm going to have a hell of a time getting through all the rest of my slides.
Basically we're here today to prove that prudent underwriting is very important to the success of any company, and prudent underwriting does not mean conservative underwriting, and prudent underwriting does not mean stupid underwriting. And we've had both of those in the past, and that's why some companies are in trouble.
Companies get in trouble for a lot of reasons: and basically they revolve around lapses, investments, expenses and mortality. We've got lots of examples of companies who have had bad lapses. In Canada we have products that if they lapse too fast, we're in trouble; if they lapse too slow we're in trouble. So actuaries have designed a product where we can't win.
I don't have to talk about investments. Everybody knows that there's lots of real estate out there for sale, especially by Canadian companies.
Expenses, we all know. If you spend too much money you could lose money to the bottom line.
And then there is mortality. We haven't had too much of a problem in our industry yet; but, since it's the last thing on the list that hasn't been hit, it's bound to be hit soon.
Now that we're into the subject of prudent underwriting in the area where it's really necessary, we have to look back to reinsurers and what happened to them when they did not have prudent underwriting. They got into trouble, and a lot of them had to pull up stakes and move on. Some had to pull in their horns and become very conservative. And these people, these creatures of liberalism became the creatures of conservatism.
Prudent underwriting is an integral part of our industry's future.
Prudent underwriting? It's necessary. It's the key to future success. It's the key to minimizing deviation. It's the key to retention management. It's the key to mortality improvement, keeping up with your actuaries. It's also the key to early actual expected success. And prudent underwriting, last but not least, keeps us in the business of life insurance. Thank you very much.
(The full debate transcript including remarks from Jerry Tamura, Arlette Mooney, Mitchell Schepps, and rebuttals was originally published in the proceedings of the 58th Annual Meeting of the Institute of Home Office Underwriters, 1994.)