Rebranding the underwriting experience — Can it be done?

SAN ANTONIO -- If life insurers were truly serious about rebranding the underwriting experience, the pesky health exam would become a free healthcare checkup.

Why not?

"But no one would ever really say that underwriting is a free health care. What if we did?" said Frank Chechel, vice president, senior account executive, underwriting innovation lead, Gen Re. "We are actually really well aligned with our customers. You want to live a long time, and we want you to live a long time."

Chechel was joined by Dave Rengachary of RGA for a session on underwriting on day one of the Life and Annuity Conference, sponsored by LIMRA, LOMA, SOA and ACLI. Titled, "The Future of Risk Selection: Navigating the Key Debates in Underwriting," the session featured the two men debating several issues.

Dale Hall, managing director of research for the Society of Actuaries, posed questions to Chechel and Rengachary. Chechel raised the health exam as part of his response to whether underwriting will become a more individualized experience.

After all, auto insurance rates are adjusted for each driver's personal experience, noted Rengachary, senior vice president and head of underwriting, U.S Mortality Markets.

"This is a problem that we created," he said. "It is amazing how much oxygen now goes back between physicians and underwriters because of this problem that we created, theoretically to sell more policies."

AI to the rescue for underwriting?

But artificial intelligence and machine learning can help improve the accuracy of the underwriting experience.

"We are now having increasing access to these incredibly powerful robust data sets and our ability to manipulate them through AI and machine learning is also increasing at a pretty astounding rate," Rengachary said. "So that the assessment that we're able to put forward has a much stronger degree of precision."

Fears over AI are largely unfounded, both men agreed. For example, AI "has a terrible record" of replacing humans in the workplace, Rengachary said.

"What they’re finding is the best coders don’t get much better when you add an AI assistant. You know who gets better? The average coder," Chechel said.

AI could help underwriters and life insurance shops in the same way, he explained. "What would that do for your company in terms of what can you do with that extra resources? So that's kind of the exciting thing."

While hidden biases are a concern, Rengachary said it isn't a concern that should stop the development of AI use in underwriting.

"Underwriting is rife, unfortunately, with human bias," he said. "Any underwriter in the room, we know that when we get cases around things that have emotional charge. ... Things like alcohol use. We bring our biases and our experiences to that."

Looking ahead, Chechel argued that life insurers are on the cusp of a "broad transformation" in underwriting. He based that assessment around the trends in AI and accelerated underwriting coming together and the changes forced by the COVID-19 pandemic.

"We have this opportunity now with much broader data sets and actually longitudinal data sets that I think we're just scratching the surface of what that could mean for the purchase process and for the entire lifecycle of customer," Chechel said.

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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