Special Report: Foreign insurance firms Flexibility, cultural adaptation is quiding principle for working in Asia

( Last of a Series ) High face amounts

Underwriting higher-amount cases usually involves much more information than a general exam or a simple medical report. In the United States, at face amounts starting above $100,000, underwriters often request more involved blood testing, electrocardiograms, urine testing, chest X-ray or stress tests. The testing US life companies take for granted is absent almost everywhere else in the world, according to underwriters overseas.

However, UK lab testing is at almost the same level of sophistication, Gyseman said, although blood profiles usually are request only for very high value amounts – above L1-million. In addition, testing for drug abuse is used only for high-risk cases, rather than routinely as is done in the United States.

In Australia, blood testing for HIV – the virus that could cause AIDS-begins at a policy face amount of A$500,000 ($276,200), said Peter Peric, an underwriter for General-Cologne Reinsurance. Insurers in Australia also take the customer’s word regarding smoking habits and don’t test for drugs of abuse.

In India, blood testing is available but very costly, thus limiting its use, said Slack. Nicotine and alcohol markers are not used, limiting an underwriter’s ability to evaluate some risks, and PSA tests, which provide markets for prostate cancer in males over age 55, are not common, she said.

Regulatory requirements vary from country to country as well, sometimes making an underwriter’s task more difficult. In New Zealand, insurance companies are prohibited by the local Human Rights Act from declining any applicant for insurance, said Peric. As a result of this regulation, life insurers must evaluate the risk and offer policies at heavily substandard premium rates. While policies may be offered at premiums of 800 percent to 1,000 percent of standard mortality for some highly substandard risks, very few of these policies actually are accepted.

Sometimes the regulations work in an underwriter’s favor. In Iceland, there is no government regulation regarding non-disclosure of personal medical information. The communities are so interrelated and their members so well known to each other, few can successfully conceal a medical history. This helps underwriter, since the incidence of hereditary diseases is high in this area.

Global customs

Business executives who hope to profit from their travel should learn about the history, culture and customs of the countries to be visited. Flexibility and cultural adaptation should be the guiding principles for traveling abroad on business. Business manners and methods, religious customs, dietary practices, humor and acceptable dress vary widely from country to country. For example, consider the following:

• Never touch the head of a Thai or pass an object over it; the head is considered sacred in Thailand.

• Avoid using triangular shapes in Hong Kong, Korea and Taiwan; the triangle is considered a negative shape.

• The number seven is considered bad luck in Kenya and good luck in Czechoslovakia, and it has magical connotations in Benin. The number 10 is bad luck in Korea, and four means death in Japan.

• Red is a positive color in Denmark, but it represents witchcraft and death in many African countries.

• A nod means no in Bulgaria, and shaking the head from side to side means yes.

• The "OK" sign commonly used in the United States and the United Kingdom (thumb and index fingers forming a circle and other fingers raised) means a zero in France, is a symbol for money in Japan, and carries a vulgar connotation in Brazil.

• The use of a palm-up hand and moving index finger signals "come here" in the United States and in some other countries, but it is considered vulgar in others.

• In Ethiopia, repeatedly opening and closing the palm-down down hand means "come here."

(Reprinted from Best Review, June 2002)