The center questions the use of factors such as employment class and education level in marketing, underwriting and pricing.
Munich Re assessed the effectiveness of Milliman Irix® Risk Score 2.2 in stratifying the mortality for the U.S. insurance applicant population.
Predictive models are an incredibly powerful tool with the potential to drive the life insurance industry forward in ways that are good for both consumers (improving their purchasing experience by removing intrusive requirements and long delays) and carriers (increasing taken rates and persistency, and increasing the accuracy of mortality assessments).
Underwriting practices today are a world away from those commonplace 20 years ago, but the biggest evolution is yet to come.
The race to develop accelerated products has driven life insurers to cautiously embrace the next generation of data.
Underwriting in the US life insurance industry has had more change in the last five years than it has in the prior 30…and many underwriters are struggling to keep up with the pace. Terms like accelerated underwriting, automated underwriting, simplified issue, predictive models and big data are bounced around at industry meetings like ping pong balls. If you are confused by all the new terminology, you are not alone.
The cutting edge of the insurance industry involves adjusting premiums and policies based on new forms of surveillance.
So how do insurers unlock value from big data? Jeff Heaton, RGA’s Chief Data Scientist, published author and professor at Washington University in St. Louis, has a few ideas. To start, he suggests it’s time for insurers to better understand the basics of data science. To that end, he self-produced a video to explain the basics in just four minutes. RGA sat down with Heaton to discuss the video and his thoughts on what every employee at an insurance company should know about this form of statistics.
Indirect use of discrimination factors that are outlawed is inexcusable and needs to be avoided by due diligence by insurer and indeed the firm supplying the data. Any decent carrier would not want to cross those red lines anyway – and that is even if the data company involved is not itself subject to regulatory oversight and/or consumer protection laws. Moral: act with integrity and choose your business partners carefully.
Insurers are using customers’ social-media posts to determine premiums, inviting the potential for our digital lives to become disingenuous performances.