Pioneering Technological Advances In Life Insurance Underwriting

Pioneering Technological Advances In Life Insurance Underwriting

By Ken Leibow - 2 January 2024

Life insurance underwriting technology has undergone significant transformations in recent years, reshaping the landscape of the insurance industry. This evolution is driven by the integration of advanced technologies such as artificial intelligence (AI), machine learning (ML), big data analytics, and the Internet of Things (IoT). These innovations are not only enhancing the efficiency and accuracy of underwriting processes but also improving customer experiences and expanding the reach of life insurance products.

Traditionally, life insurance underwriting has been a labor-intensive and time-consuming process. It involved extensive data collection, including medical histories, lifestyle information, and financial backgrounds. Underwriters would manually assess these details to determine the risk profile of applicants and set premium rates. This process could take weeks, sometimes even months, leading to customer dissatisfaction and higher operational costs.

The advent of digital technology has revolutionized this process. AI and ML algorithms are now capable of rapidly analyzing vast amounts of data, including non-traditional sources such as online behavior, wearable device data, and even social media activity. This not only speeds up the underwriting process but also allows for a more nuanced understanding of risk.

Predictive analytics, a key component of modern underwriting technology, uses historical data to predict future outcomes. In life insurance, this means more accurate risk assessments. By analyzing patterns and correlations in large datasets, life carriers can identify risk factors that were previously unnoticed. This leads to more personalized insurance policies, where premiums are more closely aligned with the individual risk of the policyholder.

Automated underwriting systems (AUS) are another breakthrough. These systems use predefined rules and algorithms to evaluate applications. In many cases, they can approve policies instantly without human intervention. This automation not only speeds up the process but also reduces the potential for human error and bias.

The IoT and wearable technology are also playing a growing role in life insurance underwriting. Devices like fitness trackers provide real-time data on an individual’s health and lifestyle. This information can be used to offer more tailored insurance products, such as policies with incentives for maintaining a healthy lifestyle.

The integration of technology in underwriting has significantly enhanced the customer experience. The process is faster and more convenient, with many life carriers offering instant quotes and online applications. Additionally, the use of data analytics allows for more personalized policies, potentially leading to lower premiums for healthier or lower-risk individuals.

These advancements are not without challenges and ethical considerations. The use of personal data raises privacy concerns. Life carriers must navigate the fine line between leveraging data for better risk assessment and respecting individual privacy rights. Additionally, there are ethical considerations regarding data use and the potential for discrimination based on health or lifestyle data.

Swiss Re “Underwriting Ease”
The Swiss Re team has developed an underwriting visualization platform that will revolutionize the process between brokerage general agencies and carrier underwriters. I met Nanditha Nandy, SVP of Underwriting Solutions of Swiss Re, in 2023 at a LIMRA Conference. She later showed me a demo of Underwriting Ease. I was impressed because it wasn’t an underwriting workbench, yet it was a dashboard that provided all the necessary information to make it easy for an underwriter to make a decision. Dan McKinney, VP of Data Driven Underwriting at Swiss Re shared additional information about the platform. I believe this is a game changer in the industry.

Underwriting Ease enables the digital consumption and visualization of digital health data (DHD), expediting manual underwriting workflows for brokerage agencies and for carriers.

In recent years, the concept of digital health has gained significant momentum. The advent of digital health has allowed healthcare providers to deliver better patient outcomes, improve disease management, and reduce healthcare costs. The introduction of digitally generated health-related data such as medical records, biometric data, and personal health data, has opened up new opportunities across the life insurance industry ecosystem as well.

Data is one of the most valuable assets for the insurance industry. The underwriting process, which is used to assess an individual’s risk profile and determine the premiums they will pay, requires significant volumes of relevant data. Traditionally, BGAs and insurance underwriters used paper-based forms to collect information about their clients’ health history, lifestyle, and other factors. However, today, the advancements in digital technology and the ubiquity of digital health data have paved the way for a streamlined underwriting process, from initial application intake to policy issuance.

Digital health data is increasingly being used by agents and carriers to evaluate a client’s risk profile. However, the process of compiling and analyzing data and subsequently transferring that information can be time-consuming and cumbersome, requiring significant human effort. That is where the integration of digital health data into a visualizing SaaS platform comes into play.

SaaS, or software as a service, is a cloud-based model for delivering software applications over the internet. SaaS platforms can be accessed through a web browser, eliminating the need for locally installed software. The integration of digital health data into a SaaS platform can provide agents and underwriters with a clear and easy-to-understand visualization of a client’s health history and risk profile.

The benefits of integrating digital health data into a visualizing SaaS platform are many. Here are some of the advantages that can be derived for agents and carriers from this integration:

Improved efficiency: Integrating digital health data into the Underwriting Ease platform can significantly reduce the time and effort required to evaluate a client’s risk profile. Agents and underwriters can quickly and easily access relevant health-related data, reducing the need for manual data collection and analysis.

Accurate risk assessment: The use of digital health data ensures that agents and underwriters have access to a rich source of relevant data that can help them make accurate risk assessments. The use of the Underwriting Ease allows underwriters to identify patterns and correlations that might be difficult to detect otherwise, leading to more informed decisions.

Reduced costs: By eliminating the need for manual data entry, analysis, and interpretation, the integration of digital health data into Underwriting Ease can reduce the time and cost associated with finding the applicant the right carrier for their policy.

Enhanced customer experience: The use of Underwriting Ease allows agents to provide a seamless customer experience. Clients can simply provide access to their digital health records, reducing the need for invasive and time-consuming medical exams.

Increased transparency and trust: The use of Underwriting Ease in the underwriting process can increase transparency and trust between agents and carriers. Agents can see the data that underwriters are using to make decisions about their policies, leading to greater confidence in the process.

The integration of digital health data into a visualizing SaaS platform can also offer agents and carriers significant competitive advantages. By streamlining the underwriting process, agents can offer quotes and policies more quickly, improving their ability to attract and retain clients. Additionally, the use of digital health data can help agents and carriers identify potential health risks and offer personalized health and wellness programs to their clients. However, the integration poses a challenge–the development and deployment of robust data analysis and visualization tools. To derive meaningful insights from digital health data, carriers must have the right tools and expertise to analyze data effectively. Carriers that lack sophisticated data analysis capabilities may struggle to take full advantage of the opportunities offered by digital health data.

To address that challenge, Underwriting Ease seamlessly connects via API or embeds into existing underwriting workflows and works with any automated underwriting engine and underwriting manual. It was designed by underwriters, for underwriters, to help the industry to take a technological step forward without radically changing the fundamentals of underwriting. A confluence of the data that matters, delivered in a focused, user-friendly visualizer that has already normalized and simplified the data. It is a single page view of all the available underwriting data disclosed by type and source. Allowing the underwriter to drill into the information needed to assess the risk. Empowering and enabling the agent and underwriters, while delivering cost savings by reducing manual UW efforts by 50 percent.* Additionally, the reduced per case review will help to address any backload of cases that manual underwriting has caused in light of the current industry wide UW shortage.

The integration of digital health data through the Ease platform has the potential to transform the underwriting process for life insurance. By streamlining the process and providing agents and carriers with valuable insights, Underwriting Ease can help life carriers improve risk assessment, reduce costs, and provide a better customer experience.

An industry leader in the underwriting innovation space, Swiss Re and its team of subject-matter experts continue to advance its underwriting capabilities. Through research and analytics, we aim to advance the capabilities of underwriting shops with speed and increased cost efficiencies. Swiss Re can help carriers and clients in developing and implementing these capabilities. Learn more about Swiss Re Underwriting Ease by visiting https://www.swissre.com/reinsurance/life-and-health/solutions/underwriting-ease.html.

Life insurance underwriting technology is at a pivotal point. The integration of AI, ML, big data, and IoT is transforming the industry, making underwriting more efficient, accurate, and customer friendly. As the technology continues to evolve, it promises to further refine risk assessment and policy customization, benefiting life carriers, policyholders, and insurance advisors.

2 thoughts on “Pioneering Technological Advances In Life Insurance Underwriting”

  1. Great summary of the technological state of life underwriting today and the value that Underwriting Ease can enable. A standardized digital “front end” to the process will be an incredible catalyst for additional digitization and an enabler of further automation and cost reduction.

    1. HiAndy, Yes I agree. Perfect fit for the Next Generation Underwriting Standards we are developing at ACORD. It’s a very powerful dashboard that speeds the process and makes it easier for the Underwriter to make a decision.

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