The Many Faces of Insurance – Life, Annuity, Health, Property & Casualty

Welcome to the Association of Insurance Compliance Professionals podcast. AICP serves the insurance compliance community by promoting relationships, exchanging information and providing learning opportunities within a dynamic regulatory environment. You're listening to the many faces of insurance, life, annuity, health, property and casualty. With your host, Elayna Kaufman, Director of Compliance for Wish Life and Health Insurance Company. Elayna has spent most of her career in insurance compliance having worked in both PNC and LAH. She is the newly elected treasurer of the AICP Mid-Atlantic chapter, as well as a proud volunteer of the AICP Student Engagement and Branden Marketing Committees. Today Elayna sits down with industry experts Stephen Fisher and Stacy Koran to discuss the different aspects of insurance categories and the careers available. Stephen has been in the insurance industry for 30 years, 25 of which are in the PNC space in various roles with differing responsibilities. He has been in the compliance department of an international PNC insurer for the past 11 years as a filings analyst. He has also been a member of the AICP for 16 years volunteering on various committees and enjoying the many benefits of membership. Stacy is principal at Milliman and has been involved with compliance consulting for over 20 years. And now, here's your host, Elayna Kaufman. We are very excited today to be speaking with Stephen Fisher and Stacy Koran about life annuity health as well as property and casualty insurance. Stephen is our in-house property and casualty expert and Stacy brings us her life annuity health experience. And we just wanted to talk on a very high level about the differences between the types of insurance and I'll let them get into it. Stacy. Sure. So I'll talk a little about very high level some of the big categories of life and health and annuity coverage. Life and annuity tends to be combined together and regulated very similarly, but they do pay out pretty differently where life insurance pays when you die and annuities pay while you're alive and pay an ongoing stream of revenue. These products can be offered on a group or an individual basis with all kinds of various features and flavors, but kind of key areas we see those getting broken down into are either fixed products where you have some guarantees and variable products which are treated like investment securities. And then there's kind of something in between an indexed life or an indexed annuity that takes some of the benefits of a security of a variable product, but also has caps and floors that can limit your risk and provide some guarantees so they're not regulated like securities. On the health side, there's a whole bunch of other varieties of products that we see and I like to kind of generally break those down into products that are subject to the Affordable Care Act, which is what most people think of when they think of health insurance, they think of their medical insurance, and then products that are accepted from that are exempt. So on the health side, I think most people know health insurance, the medical insurance that they get that's maybe got a network assigned like a preferred provider network or an HMO. All of those can fall into the health insurance bucket. On the accepted or alternative type products that aren't subject to the Affordable Care Act and regulated like medical insurance, there's things like critical illness or other indemnity type products that if you get a diagnosis of a condition, it'll pay you cash. It doesn't really tie to expenses that you might have for medical. There's things like disability income that I think people recognize a lot that's regulated like health insurance, but really is an income replacement based off of a health status trigger. You become disabled, long term care, Medicare supplement. All of those are types of health insurance that pay out in different ways, but they're not the traditional what we think of as medical insurance. And they all get regulated slightly differently with products that are marketed to seniors like Medicare supplement and long term care being a little bit more heavily regulated. And then other products may be a little bit less so where they're more broad market, particularly when they're sold in an employer situation where you have kind of a savvy consumer there. How about on the PNC side, Steve, you guys have all kinds of things too. We do. Thank you very much for that, Stacey. Alana, thank you very much for having me. I very much appreciate your generous description of my expertise in the PNC side. I just wanted to begin by noting that the opinions and views expressed by me on this podcast are my own and are not representative in any way of those of the Beasley Insurance Company Incorporated. I was asked to say that. So there we are. Yeah, it's property and casualty. It's a huge space. It encompasses so many different products and programs. And from like a 30,000 foot view, we're looking at property and casualty. It's a coverage that protects the stuff you own like your home car or even your pets. And it offers liability coverage, which helps protect you if you're found legally responsible for an accident, for example, that causes injuries to another person or damage to another person's car. That's the property and casualty that I think most people are aware of. Home insurance, renter's insurance, automobile insurance. And within the property and casualty umbrella underneath it, you've got the personal insurance and you have commercial insurance. And the personal insurance is again the example I gave with regard to the auto accident or the home fire or somebody breaks into your condo or apartment and steals all your belongings. That would be considered personal insurance. The commercial insurance starts with workers' compensation, for example, or includes workers' comp. Errors and omissions, architects and engineers coverage, directors and officers. Kidnap and Ransom is a program that I've offered under the property and casualty umbrella as is what everybody's keenly aware of now is cybersecurity. So those are just a couple of the products that fall under the umbrella of personal property and casualty insurance, both again personal and commercial. Great. And Stephen, could you talk a little bit more about casualty versus property? So I know you're talking about it a little bit, but what instances are considered solely casualty versus property? Sure. Great question. Casualty insurance, for example, is a common insurance policy for small business owners to take on since it protects them from liability in the situation, for example, where a worker is hurt on company property. So where the property is covering property like a car, a house, a physical business structure, casualty comes into play, for example, with architects and engineers. You know, while they're responsible for the designs of a structure, if throughout an investigation after a claim, that structure was found to be inadequately built based on the architect and engineers designs, for example, they could be held liable for any injuries that occur, certainly damage if the building collapses, for example, or the bridge, for example, that sort of thing. That's certainly a high-level overview. There's so much more that would have to be considered. But something like that would be considered a casualty event. Okay, great. So we wanted to talk a little bit, too, about the careers available in both PNC and LAH. And just for our listeners, these are common acronyms that are used in the insurance industry. People hear PNC and LAH to describe life annuities, health and property and casualty. So Stephen, could you talk a little bit about the careers available in the PNC realm? Sure. There's quite a few to be had, and I've done, I think, most all of them. So the first one that I'm sure everyone knows about, certainly from a personal perspective, is sales. You have insurance agents, you have insurance brokers. As a consumer of insurance, one who has to buy car insurance or ensure their property, their home or their belongings in an apartment, you'll deal with an agent to shop around and get you the best price. That would be an independent agent. Or you can deal with a captive agent, which is someone who works for all state or state farm or nationwide, and you will buy insurance from them. So there's the sales aspect, online for sure. Most companies have an online presence where you can go and deal with an agent per se, but there's still sales involved in that the company is selling you something on their website coverage. So that would be the sales aspect. There's also the underwriting aspect, which means once you make an application for insurance, there is somebody that actually looks over your application to ensure, first of all, that you're eligible to be insured by them based on their underwriting guidelines and that the company wants to take on the risk. And there's a lot of detail on both sides for sure, but as a commercial underwriter, there's a whole lot to consider, as opposed to a personal underwriter, if somebody's applying for an automobile policy, the underwriting, well, stringent and in-depth, there are two different weights with regard to underwriting, commercial versus personal insurance. So there's sales, there's underwriting, and last of course, something we've all had to deal with, I'm sure, is claims. There's the initial claim handling. When you make a phone call to the 800 number, hey, I've been involved in a car accident. There's a person that takes that call. They would then hand that off to a claim adjuster. So there's claim adjusters that are hired and work for companies that'll go out and look at the damaged car or the burned home and make an assessment as to how much is going to cost to repair that car or rebuild that home. And then within claims, of course, there's what they call the special investigative unit. And on a personal note, my father-in-law worked for a special investigative unit years ago for an insurance company, and he has some stories for sure. But the claims aspect of any insurance company is where they make their mark, because how they handle a claim determines whether or not they're looked favorably upon by their insured, for sure, and even the person that caused the accident, because they're going to have to deal with the company's claim adjuster or the final reviewer. So that's where a company really earns their stripes, so to speak. So you've got sales, you've got underwriting, you've got claims. Those are the three big career opportunities or fields of work on the PNC side. Yeah, and I'd say on life and health, it's really similar. We have those same areas too, sales, claims, and underwriting. Obviously, the underwriting is a little different. We're looking at people's health for both life and health products, except for medical, which doesn't currently have any underwriting anymore. But looking to see, are they healthy? What kind of risk is this person if they're going to, you know, what's the chance of them dying soon for life insurance? And what's the chance of them having a claim for health insurance? And then on claims, very similar looking at paying those deaf benefits or paying ongoing claims, long-term claims. I think one thing that comes up more frequently on particularly certain types of health products is there's ongoing claims. So you might have somebody who's coordinating those claims. For example, a disability claim could go on for years or a long-term care claim. And so you have somebody with a company that's kind of coordinating that care to try to help this person through, get the best care they can, and ideally, for disability, get them back to work or for long-term care, help them stay in their home or be more flexible with the options that they have to pay out that claim. A couple other areas I would think about are compliance, because that's what we do, and product development, which might be kind of fitting within maybe marketing or legal or compliance as well, and actuarial as part of that too, as a person who works for a large actuarial consultancy. It's surrounded by actuaries all the time, so they're kind of measuring that risk that's out there and figuring out how best to price these products. And separately, outside of those divisions, I kind of, I think of three other divisions when I'm thinking of careers that might come up in any kind of insurance, and that can be either working for the industry, so like Steve is working for an insurance company, working for a consultant, like I do, where our clients are industry generally, or working for a government, a federal or state as a regulator, and regulating insurance products, and all of those career options exist as well. Thank you, Stacy, for reminding me of course, my industry, PNC, in the compliance department of a commercial insurer, we've got compliance, we have actuary as well, we've got product development, we've got wordings, people that are responsible for developing the policies and the endorsements and the applications for a new product. So while my description was relating more to what I think most everyone is aware of, you did make a good point with regard to careers that are in the industry, aside from that which everyone's mostly aware. Yeah, we're kind of the behind the scenes people, aren't we? Exactly, that's a good way to put it, you know, nobody, at least insurance as a field of study is relatively new, when I was coming in 30 odd years ago, I didn't know of anyone that said I want to get into insurance unless their father or mother owned an insurance agency. So now that I've been in it and dealt with the actuaries, and it's a huge part of any insurance company having to develop the rates or change the rates or support that sort of thing, they're huge pieces of any insurance operation. Yeah, what I find interesting about insurance is, as you both pointed out, there's something for everyone while insurance may seem drab to some people, if you're interested in behind the scenes work or marketing work or actuarial or customer service, there's really just a space for everyone under the umbrella of insurance. For sure, and you're seeing that even more so in the commercial side of the PNC house, I'll say at least, like I said, in the beginning with the programs that we offer, certainly cyber insurance is huge right now. Trying to stay ahead of the curve as it were, making sure that companies can buy insurance to cover an exposure that they have, or if they're hacked, they've got steps in place that they can follow to ensure that their insurers or their customers aren't hung out to dry or are covered and are being able to be indemnified, as it were. Cyber is huge. Like I said, kidnapping ransom insurance, there are programs like that. That's more of a surplus lines insurance product, and I know we haven't gotten into it yet, but as far as regulation, I know Stacey mentioned the regulatory side of insurance, where the states determine what companies have to do in order to be able to write insurance in their particular state. There is a surplus line side, and there is an admitted side of the house, and on the admitted side is where companies like mine say to each state, here's a product we want to offer, they'll look over all the forms, the applications, make sure it meets the state requirements, and then they'll come back and say, okay, you're approved to write this product in my state. The surplus lines product, there isn't that regulation, and the companies still have to meet the guidelines, they have to follow the rules as it were, but they don't have to file the forms and the endorsements, they don't have to file the rates, they don't have to show rate support on the surplus line side. So that's how surplus and admitted differ, that's where a product like kidnapping ransom, deadly weapons insurance, really niche coverages fall. You know, your comments on niche coverages is interesting, and I think that it kind of goes back to Ilana's point that there's something for everybody, and I think that there's room for a lot of creativity and insurance, and people do not realize that. I'm assuming that anybody thinking about an insurance career thinks, well, there's not a lot of opportunity to be creative, especially if you're looking at laws or regulations too. What there really is, as you look at all of the risks that we face, those risks are continually changing, and the way that we protect people from those risks is changing as well, and people's needs change. Really obvious on the P and C side as you're looking at changing technology that you're trying to create protection against, you think about self-driving automobiles, I mean, that's changing the way that insurance is written for automobile insurance. But even on health insurance, people's health isn't really evolved except for the standards of care for it and the ability to care for certain conditions, but the way that we pay for health care and the challenges with paying for health care have changed over time. You see a lot of innovation on the health side with how do we improve that whole process, and then the cost of medical care going up, and how do we handle maybe mitigating some of those claims up front by adding services that will help encourage earlier use of health care so that you don't get to an extreme place where the expenses are very high, so improving wellness overall, improving financial wellness too on the life and annuity side. There's a lot of real innovation that happens in there, and I think people just completely overlook the creative opportunities that there are with insurance. I agree, and one of the points with regard to the health insurance is when they started to make wellness visits, you didn't have to pay a deductible to every six months or maybe a year where in the past, you would have to pay a deductible if you went to your doctor, but in order to encourage people to go to the doctor more frequently to head off medical condition or something that might lead to debilitation down the road, that sort of thinking where not so much they're giving away the coverage with a free doctor visit, but they're heading off a potential more costly event. That's another example of how insurance can help people. So we've spoken about this a little bit just organically, but is there anything specifically that the two of you find where PNC and LAH collide and they overlap? I was kind of smiling when Steven talked about Kidnap and Ransom because one of the products that we work on is on kind of the health side, but it's a hybrid, it's travel insurance or kind of special risk insurance for people who are maybe going overseas on a specific assignment or they're going to be engaging in some kind of activity, maybe a camp or a sporting event or something like that where they have a unique risk, and they face combined risks in that situation. They're facing some health risks potentially, so what happens if you're overseas and you get ill, do you want to have coverage, insurance coverage to treat you or to maybe help you get back home? But you also have risk of property, Kidnap and Ransom can come in in certain countries depending on where you're traveling, so can just something as simple as a lost baggage or other kinds of property loss that might occur as a result. And those products are somewhat combined, we tend to file them with the states, the states regulate them generally under PNC, but sometimes accident or health, but they have components of both PNC and health insurance. And I think another area where they might collide is with regard to workers' comp insurance. You know, if a worker is injured on the job, the employer has workers' compensation insurance, but certainly their health insurer may be involved with perhaps, if not immediate care, aftercare, rehabilitation services, that sort of thing. Workers' comp is not a side of the insurance industry with which I'm very familiar, but I do know that it is written as a PNC product, but I can certainly see how there would be room for health insurance to be involved in a workers' comp claim. The weeds are pretty thick down there, I wouldn't even want to try to wade through them, but that would be one area where health and PNC can collide. Yeah, absolutely. So you don't really see many, I don't know of any off the top of my head of insurance companies that do both LAH and PNC. People tend to stay in their own lane, or companies tend to stay in their own lane. Is this because of regulation? How does regulation vary between LAH and PNC? I would say there's some companies that have licenses to do both. They may split the company, or they may have separate companies that do different types of work, but there are some. You do have to make, the company would need to ensure that it has a certificate of authority that allows it to operate in all of the lines that it wants to do business in, and that can be a challenge. And there certainly are some differences in regulation, you're going to have different licensing, producer licensing requirements, and a variety of financial requirements that would apply that could be a challenge. Right, and I know there are companies that you write certain health policies, even though they might be a PNC company, like Stacy said, as long as they've got the necessary paperwork requirements, licenses for sure, as long as they have everything that they need in order to transact business on both sides of the house, I'll say. I don't know of many that do that. I think there's certainly a cost associated with doing that sort of thing, but it does happen. It is something that has happened. There are companies that are like that, but there are not many, I'll say. Okay. Does anyone have any final thoughts about LAH and PNC that you would want to communicate to students or people looking to get into the insurance industry? One thing is an organization like AICP, the networking opportunities available at our national conference, even though it's going to be a bit different this year with it being a hybrid, both in-person and virtual, pre-COVID, I'll say. Those conferences are an excellent opportunity to develop or build your network with regulators. There's industry people. There are consultants. There's a whole host of different types of people at the AICP national conference. And as a student, if you're interested in the insurance industry, that would be a great place to get started in, again, building and developing a network of people that you'll most likely work with because the insurance industry, at least on the PNC side, there are not a lot of major companies and you're going to work with somebody for a couple of years and then maybe eight to 10 years down the road, you'll run into them again. And an organization like AICP that has individual chapters that have events as well that are more focused on where you live, a student could only help themselves immensely by getting involved in the local and national level. Yeah, I absolutely agree. Looking at trade associations is really, really helpful. And it's a really small group, especially once you get into the specialty areas. So all of the people in compliance, we all know each other, and it's kind of surprising how you run into one another over and over. So AICP is a great one. If you're looking at actuarial, the Society of Actuaries is great. I think there's a different one for PNC, a different actuarial group. But there's a lot of different trade associations, so reaching out to people in those associations is a great idea. Most of us love to talk about our career and opportunities. And a lot of companies are looking for interns. And so finding people who want to try out a career, I think that kind of networking is going to be a really great opportunity to find those internship opportunities and see if it's a career that you might be interested in. Couldn't agree more. Amazing. Thank you both so much for speaking today on your perspective fields, and we're really grateful to have you here and as members of the AICP. Most welcome. I appreciate you're asking me. Thanks very much for your time. Thank you.