Prior to COVID-19, 46% of American adults did not own life insurance and of those who did, many were underinsured, according to research by the Life Insurance and Marketing Research Association.
The industry has been talking about the “future of UW” for decades, but now COVID-19 has “accelerated the inevitable” and the future is now.
As accelerated underwriting (AU) and artificial intelligence (AI) begin to turn life underwriting upside down, several NAIC working groups are seeking to bring order to the disruption.
Life insurers need actionable responses to current underwriting challenges – including the need for fluidless Accelerated Underwriting alternatives, while striving to maintain the same level of mortality.
Among the areas addressed include the structure of accelerated underwriting programs, how programs are monitored, how accelerated underwritten business is performing relative to expectations and how companies are considering accelerated underwriting cohorts in the context of VM-20 assumption setting.
Top life underwriting issues include regulatory concerns, accelerated underwriting, and the opioid epidemic.
Lest anyone think the previous exchange is fanciful or seems a bit paranoid, it is already happening. It is known as using accelerated underwriting using external data and over two dozen U.S. insurers are currently using it.
The pressure is on for carriers to provide the best customer experience, while implementing consistent, comprehensive and accurate underwriting policies. Advanced e-underwriting systems can help insurers respond.
The traditional method of applying for life insurance is quickly becoming the exception rather than the rule, as more and more companies strive to improve the customer experience and expand their applicant pool by offering a faster and less invasive approach to buying life insurance.
Accelerated underwriting programs continue to evolve at a rapid pace. Triage systems have become a key element in many of the newer programs in the market. Depending on the criteria used at the triage point, these programs can have residual effects on class prevalence and mortality, which in turn affect the profitability of these programs.
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