In underwriting, the ability to obtain accurate health information from an applicant is paramount. The practice of asking people to report their health has been perfected over decades, yet under-reporting remains an issue in markets around the world. This leads us to consider: is it something about the way we ask the question?
With decades of underwriting experience to research, the author reviews some of the criteria commonly used to try to answer the question: “We have done well in the past, but could the industry use its criteria to make risk selection more effective?”
In my last blog discussing Gen Re’s work on decision biases, I shared how something called the fundamental attribution error inclines us to overweight the contribution that individual attitude and skill makes to our performance and underweight the role of the context in which we work.
In recent years, life insurance companies have started offering acceleration of a portion of the face amount of the life insurance policy to those who are chronically or critically ill. This article discusses the more common form of the chronic illness riders found in the U.S. marketplace today, as well as considerations to control the risks under that rider.