Historically, insurance premiums were differentiated only by age, with gender (now removed in some markets) and smoking incorporated later. The introduction of a numerical rating system 100 years ago meant underwriters could immediately better differentiate medical risk. This allowed them to broaden their offers of cover beyond “only healthy individuals”, thereby realising the significant economic potential and much greater inclusion by extending cover to so-called substandard risks.
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.
Slides from Hank's presentation at the WAHLU 2019 Spring Seminar have been posted at the WAHLU website.
‘Insurtech’: our inboxes are full of news alerts, and hardly a day passes without a notable insurer or reinsurer somewhere commencing a digital initiative, applying artificial intelligence, partnering with a hi-tech high-flyer or investing in a digital/data/analytics start-up. Insurtech is big these days.
Top industry analysts discuss hot technology issues such as blockchain, insurtech, cybersecurity and more. These present both challenges and opportunities.
The life industry finds itself at an inflection point as insurers come under growing pressure to position themselves to embrace genomics and genetic testing. Best's Review explores the underwriting implications of rapid advances in genomics, including research by RGA and King’s College London into the risk prediction potential of polygenic risk scores for incidence and death from breast cancer and coronary artery disease.
Resource asked insurance industry leaders to share their thoughts on what 2019 holds for sales and profitability, information technology, customer service and human capital. We also asked them to discuss the fraud risks and business disruptors they will face.
This final article explores the future of accelerated underwriting in the context of a broader consideration of the future of risk selection in general. It follows some of today’s prominent trends – personalized products, underwriting engagement, and heightened risks and regulations – to their potential long-term outcomes, and concludes with basic steps insurers can take today to help lead the industry of tomorrow.
The digitization of the life and health insurance business is happening at breathtaking speed. With that, the policy application and underwriting processes are being brought to the attention of people who used to be less concerned with them - such as actuaries, marketing folks and product managers.
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.