More and more individuals use – be it on purpose or unknowingly – devices that track medical and behavioral data, and the cost of such devices is steadily falling, contributing further to their integration into daily life. Mobile applications devoted to health are available by the tens of thousands and are becoming ever more popular, with some exploring the trend of “gamification”, whereby users are rewarded to reach certain targets, like number of daily steps taken.
Life and annuity insurance companies are seeking any and all means to improve business performance in a time of rapid change. Advancements in data and analytics promise to deliver significant improvements in the speed and reliability of decision-making and offer insurers a competitive advantage.
It has been difficult to attend an underwriting conference over the last two or three years without hearing about ‘wearable technology’, ‘personalized health’, ‘wellness programs’ or similar. Alongside these have been discussions about ‘big data’, ‘predictive modelling’ and ‘predictive analytics’, and the potential uses of alternative data sources in the underwriting process for greater accuracy or efficiency.
The life insurance industry has relied mostly on the knock-out approach to underwriting preferred risks. When reviewing the thresholds for individual risk criteria, one may ask whether the system is too liberal – i.e., are we admitting too many questionable risks into our best classes? Yet industry experience seems to indicate that the system works well.
Observers of John Hancock’s innovative program have focused on data collection, but Vitality shows how the Internet of Things supports the future of the life insurance customer relationship as a high-touch partnership of shared interest in the policyholder’s well-being.
Life insurance for juveniles has been a fairly simple proposition. Most insurers offer a Juvenile Coverage rider to a parent’s policy for a nominal face amount and charge. Others offer stand-alone low face whole life policies. Coverage traditionally has been for final expense (the rider) or as a primer for the child’s savings (whole life).
Genetics are obviously one of the important factors in assessing longevity and in performing life underwriting. Family history is asked about on virtually every application for life insurance. Longevity helps in looking for preferred issues, and hurts when the pervasive pattern is an increased risk of early disease.