accelerated underwriting

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.

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.

On 19 January 2019, the New York State Department for Financial Services (DFS) issued a circular letter concerning the use of external consumer data and information sources for life insurance underwriting. This followed a prior notice sent to insurers that the Department was investigating the use of such data for potentially unfair or discriminatory practices.

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 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.

Beginning the journey into accelerated underwriting? Although the path to an accelerated underwriting program can and should be customized – and adjusted along the way –  several basic steps can help any company get started. 

The underwriting automation engine has undoubtedly become a popular approach for many insurance organizations seeking to increase efficiencies and augment their workforces. While implementing this technology is likely vital to remain competitive, there is often a disconnect between the expectations and the reality of automation’s impact on underwriting operations.