Meeting rising consumer demands for convenience and speed
Despite these technological advances, the life insurance industry—which predates the telescope—was sometimes slow to adopt innovations. Some firms wondered, for example, if the data models could be trusted.
“If the data is off by even a small amount,” Rengachary explains, “the profitability of that policy or group of policies vanishes and becomes negative very quickly.”
To help the carriers they work with determine best practices, RGA researchers regularly evaluate automated underwriting tools. A recent study, for example, determined that IntelliScript’s combined use of prescription and diagnostic data helps insurers better pinpoint adverse risk.
“The more confidence you have in the accuracy of your data, the more aggressively you can price that risk,” Rengachary says.
Still, it was the COVID-19 pandemic that finally forced holdouts to embrace automated underwriting. Not only did the technology spare consumers, and clinicians, from the risk of in-person paramedical exams, but IntelliScript’s digital assessments aligned with the rising consumer expectation for fast and convenient experiences, empowering life insurers to make rapid policy decisions at the buying pace consumers prefer.
It meant a significant shift in underwriting guidelines.
“Our confidence in carriers being able to change their underwriting so quickly depended a lot on the data they were able to supply to support those changes,” Rengachary says. “The carriers that were engaged with Milliman, and had that data, were a step ahead.”
The result: Carriers were able to offer coverage during this time of need, and savings in risk-assessment costs even enabled their expansion to middle markets.
The future: Leveraging AI to further expand coverage
Automated underwriting continues to overtake full underwriting for most policies, and Bolduc envisions a future when IntelliScript can leverage “all valuable electronic data” to gain a truly complete medical history on an applicant.
“To ultimately offer more insurance to more people is highly dependent on finding new sources of data,” Rengachary says.
Artificial intelligence will be essential, as will other advanced analytics that aggregate real-time patient information. With these tools, insurers will be able to further save on risk assessment and ultimately offer coverage to more people, including those with serious health conditions.
“Across our actuaries, underwriters, clinicians, and technologists,” Bolduc says, “Milliman has the expertise to know the market, obtain the data, and build the tools to correctly assess risk, so insurers can make the right decisions and more people can get life insurance to protect their loved ones.”
This article was written by Milliman Senior Writer Adin Bookbinder.
