BALTIMORE ‚Äď Because quick change is not what life insurance is all about, the answers to the industry‚Äôs persistent challenges might sound familiar to the approximately 400 attendees at the 2019 Life Insurance Conference opening today.
But changes are not only coming, they are accelerating, said David Levenson, who is scheduled to open the conference‚Äôs general session Tuesday for the first time as LIMRA/LOMA‚Äôs CEO. The event is co-hosted with American Council of Life Insurers and the Society of Actuaries.
Speaking in advance of the conference, Levenson acknowledged that the speed of change depends on perspective.
‚ÄúIf you just look at something like technology, it’s so different today than it was 10 years ago on our industry,‚ÄĚ Levenson said. ‚ÄúAnd 10 years from now it’s going to be much different than that.‚ÄĚ
Artificial intelligence fueled by big data is accelerating change in a key area ‚Äď underwriting. Despite the many announcements that underwriting is speeding up, larger face policies still seem to be stuck at a month or so.
Levenson said a few trends are meeting to push progress on underwriting.
‚ÄúIn the underwriting processes, the use of artificial intelligence and analytics is it a point where we’re seeing less reliance on medical exams because there’s such a rich history of medical records that could be accessed and are construed as sufficiently reliable for underwriters to make valid decisions,‚ÄĚ said Levenson, whose actuarial background becomes apparent when he discusses data. ‚ÄúIn another five years or 10 years, the ability to assess one’s health and future mortality risk would be more advanced. That’s part of the process that will endure to the benefit of the end consumer because it will be a quicker and a less invasive process.‚ÄĚ
And a less invasive process means more sales. According to LIMRA data, 52 percent of consumers considering life insurance are more likely to buy without a physical exam.
Of consumers who wanted to buy life insurance through a simplified underwriting, 65 percent said one of the main reasons was that it ‚Äúavoids the need for a medical exam (requiring blood and urine samples).‚ÄĚ
‚ÄúFast and easy‚ÄĚ was the most common top reason that simplified underwriting would prompt buying, with 72 percent choosing it. Other top reasons were ones that might not come right to mind, with 65 percent choosing as top reasons ‚Äúit is unbiased and objective‚ÄĚ and ‚Äúit provides transparent explanations for risk classifications and product pricing.‚ÄĚ
Why consumers would buy life insurance with simplified underwriting; LIMRA data
It might please agents to hear that less than half (45 percent) leaned toward online buying because ‚Äúit avoids the need for a face-to-face conversation.‚ÄĚ So, the ease of the online process seems to benefit agents rather than cut them out. ONLINE FACTORS CHART
The need for the industry to improve processes may help a persistent problem of America‚Äôs underinsurance, according to LIMRA data. Only 54 percent of Americans have life insurance and those households that have it are typically underinsured by $200,000.
Quick and accurate analysis of big data can help the industry be there at the moments when consumers want life insurance.
‚ÄúOne of our statistics is that 41 percent of Americans considered a life insurance purchase at a time in their lives that something significant is happening,‚ÄĚ Levenson said. ‚ÄúFamily change, birth of the child, whatever the case may be.‚ÄĚ
This is where the actuarial meets the actual. Pulling all these factors together, not only data analytics, but also other segments such as blockchain, is vital to enhancing the industry‚Äôs relevance.
‚ÄúThere is where technology tools, artificial intelligence and social media will allow our member companies to reach out to those individuals, often through a third party, at the time that they are most in need,‚ÄĚ Levenson said. ‚ÄúThe distribution part of the chain, the underwriting part of the chain, the financial reconciliation part of the chain, all of that is evolving for the good of the customer ultimately.‚ÄĚ
Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents‚Äô association. Steve can be reached at [email¬†protected]
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