Better underwriting through data source analysis
Rick Pretty (Senior Vice President, Deputy Head of Life R&D for the Life & Health division of SCOR in the Americas) describes how SCOR’s R&D teams can help to make underwriting more efficient through the comprehensive and dedicated analysis of data sources. As the Life insurance industry continues to look for innovative ways to respond to the changing needs, expectations and buying preferences of 21st century consumers, SCOR has responded by expanding its R&D capabilities to better assist and partner with its client companies.
With the changing demographics of potential life insurance buyers, particularly the emerging millennials and the declining availability of the underwriter workforce, insurers are increasingly recognizing the need for a faster, less intrusive, digitally-based insurance buying experience. But where simplified issue programs have succeeded in achieving speed and less intrusiveness, they have not been able to do so at a price that is competitive with what is normally only available through a traditional full medical underwriting process. As a result, accelerated underwriting programs, which can offer speed, less intrusiveness and competitive pricing, have become a key initiative for many insurers.
In the United States, many new data sources have become readily available and are cost effective, such as criminal records checks, clinical lab histories and risk scores based on credit attributes or prescription drug history. SCOR’s R&D team studies have shown these data sources to have statistically significant mortality risk attributes that can supplement or, in some cases, replace traditional fluid-based underwriting inputs, often with minimal mortality risk implications. It is often challenging for companies to assess the relative mortality impacts of these new data sources, alone or in combination with others, and to determine which data sources are most relevant for the particular accelerated underwriting program objectives which the company wants to pursue. That challenge is what SCOR’s R&D team is committed to address.