technology

A half century ago, physicist and philosopher Thomas Kuhn first coined the phrase “paradigm shift” to describe a fundamental change in assumptions. The term has since been over-applied to everything  from economics to politics – even becoming the title of an episode of Star Trek! Yet while so often misused,  I believe the term paradigm shift perfectly describes what is happening in underwriting today.

Wearables introduce a multitude of ways to monitor health. The quality and quantity of information supplied by wearables will transform how we manage our lives. There is a huge opportunity for life insurance companies to change the way we interact with our customers and to improve how we manage risk.

New global research released by Vitality, a leading behavior change platform, reveals that financial incentives combined with wearables encourage people to significantly increase their physical activity.

Could 2019 be the year of an underwriting technology transformation? We’re not yet ready to make that prediction, but we do see the makings of a transformation, as more insurers invest in technologies that they believe will deliver solid returns to their top and bottom lines. In fact, underwriting is the second-largest category within the growing life insurtech investment sector.

Can machines learn? RGA Senior Data Scientist Dr. Dihui Lai thinks so, and he should know. Lai recently unveiled an RGA-developed “AI-Augmented” underwriting system at the Society of Actuaries Predictive Analytics Symposium and took a few moments to explain the results.

Customers can withhold their fitness data, but that will result in higher premiums, which may put life insurance out of reach for low-income earners. This in turn could have an impact on whether would-be homeowners can take out mortgages, some of which can require a life insurance policy on the principle borrower.

While wearables and apps are most closely associated with promoting physical fitness, technology is increasingly being put to use in lifestyle monitoring of the elderly and others in need of care.

The practice of life underwriting is undergoing a lot of change as insurers look to speed up and enhance the customer experience. Big data, artificial intelligence, pharmacy records, accelerated underwriting and more are playing a part.

For insurers to effectively utilize wearable technology, it is important to understand the metrics captured by devices. Insurers must also be mindful of regulations, set reasonable expectations, and balance the risk and rewards of new developments.This white paper summarizes the considerations.

A company using what seems like a fun smartphone game to get you to walk more might be a slippery slope. With access to all that data, what will a big corporation ultimately do with it? This is still new, so the implications are murky.