1. Jill Eberle MSFS, CLU, ChFC, CPCU, FALU Operations Manager State Farm Life Ins. Co.

2. Overview Competition in the Life Insurance Industry Where does Underwriting fit in? Role of the Underwriter Risk Classification Underwriting Tools Types of Risk The Underwriting Decision In the News

3. The Competition Mutual versus Stock Multiline versus Life only Financial Services organizations How do companies compete?

4. Where does Underwriting fit in? Pricing Mortality Persistency Expenses Investments

5. Role of the Underwriter Risk selection Product knowledge Producer support Customer advocacy Support of organizational goals The Underwriter - Jack of All Trades, Master of Hats

6. Life Underwriting The Key: Understand the complete picture and know what’s important It’s about BALANCE – obtaining the right type and amount of information to appropriately classify the risk

7. Underwriting Tools Application Examinations Interviews/Questionnaires Blood/Urine/Oral Fluid EKGs Prescription Drug History Attending Physician Statements Motor Vehicle Records Inspection Reports MIB

8. Types of Risk Medical Risk Financial Risk Motor Vehicle Risk Foreign Travel/Residence Risk The Occupational Exposure Avocation Aviation Personal Risk

9. Other Considerations Insurable Interest and Ownership Beneficiaries Antiselection

10. Risk Classification Often times use a standard manual Average or “standard” mortality risk represented by a value of 100% Factors that impair or improve mortality are assigned debits and credits accordingly Overall risk is given a score that translates into a final rating Judgment of Underwriter is needed to adjust for variable factors given the specifics of any individual case

11. The Underwriting Decision Discounts from Standard (ex: Preferred, Super Preferred) Table Ratings Flat Extras Exclusions

12. First Year Death Claims Natural Causes 63% Accidental Death 37% Average age of death, 41 years of age Motor Vehicle Deaths Heart Disease Homicide Cancer What can we learn?

13. In the News Predictive Modeling Stranger-Owned Life Insurance Simplified Issue Products Genetics and Underwriting Epidemics Privacy Underwriting Manuals

14. Q and A