A novel hybrid approach to simplified life underwriting has exploded onto the industry landscape. Each passing month finds several more carriers rolling out what has come to be dubbed “accelerated underwriting” (AU).
As we all know, the cost of most life insurance products is based on the risk of dying: policies for males, older individuals and those having health impairments are priced higher than for younger, healthier individuals.
My first experience with an electronic application was in 2002. I was working with a major credit card company who included a flyer along with the billing statement that provided information about how to apply on-line for their term life insurance product. We didn't know how many applications to expect; but based on the wide distribution, we planned on a high number.
After spending 17 years working at life insurance carriers assessing large face amounts, the opportunity to move to the field presented itself and I jumped at the chance. The one observation that has been consistent can be narrowed down to one phrase.
It's long been understood that life insurers have lagged other sectors in digitizing their business processes and directing money to new technologies to try to gain a competitive edge. The only question is, how much have they underinvested?
The practice of underwriting insurance is a fine mixture of art and science. To be successful, it takes a lot of common sense, even more experience and a well-rounded team of experts. Time and practice are the true keys to the profitable underwriting of life, health and disability insurances. As you can probably imagine, factors such as age, gender, occupation risk, financial viability and adverse health history play significant roles in the underwriting of most insurance. But other, less obvious factors come into play when working in the specialty-risk side of the life and health marketplace.