2024 Life Insurance Mortality Risk Management
Study shares critical new insights for insurers
to improve decision making and enhance automated life
applicant reviews, particularly for traditionally high-risk
populations with better-than-average mortality risk
ATLANTA, Aug. 15,
2024 /PRNewswire/ -- LexisNexis® Risk
Solutions today announced its 2024 Life Insurance Mortality
Risk Management Study which reveals new insights on how the
integration of medical and non-medical data can significantly
enhance the underwriting process for life insurance carriers and
improve the application experience for applicants. This new study
demonstrates that by analyzing electronic medical data in
conjunction with non-medical data, such as public records, driving
history, and insurance-focused credit attributes, carriers can
better segment applicants and identify new opportunities for
accelerated underwriting.
Key Findings and Methodology of the Study
- Enhanced Segmentation Beyond What's Commonplace: Even
within populations considered high-risk, the study found segments
with better-than-average mortality risk who were found to be
suitable candidates for accelerated underwriting. For instance, 10%
of applicants with type 2 diabetes and 60% of those with asthma
have average or better-than-average mortality risk.
- Improved Decision-Making and More: Leveraging both
medical and non-medical data can help carriers reduce mortality
slippage, improve consistent decision making across the
underwriting process, use structured data to uncover additional
automation opportunities, and, ultimately, help improve the close
time on the policy process.
- Consumer and Insurer Benefits: Integrating
these data sets streamlines the underwriting process and
further reduces the need for oftentimes inconvenient
and stressful procedures like blood draws and additional medical
office visits. This approach benefits insurers by saving time and
reducing costs, and benefits consumers by providing a faster, less
invasive process that they may be less likely to abandon.
Additionally, consumers are afforded greater transparency through
the consumer disclosure process and LexisNexis Risk
Solutions compliance with the Fair Credit Reporting Act
(FCRA).
- Study Methodology: The study analyzed data
from a population of 50 million individuals over five years
(2018-2022), covering over 1.7 billion medical claim lines,
diagnoses, procedures and specialty data.
"Our new study highlights nuanced insights, found through a
combination of medical and non-medical data in life
insurance underwriting, which reveal that many applicants with
conditions traditionally requiring manual review could be
candidates for accelerated processes," said Matthew Stull, director of data science, life
insurance, at LexisNexis Risk Solutions. "These key new findings
have the potential to substantially improve how life insurers
assess and triage risk through accelerated underwriting for
traditionally high-risk populations with better-than-average
mortality risk. By incorporating LexisNexis® Risk
Classifier into the life underwriting process, insurers can find
cases that would usually require manual review and accelerate them
while maintaining accurate risk assessment standards. This is
significant because of the benefits for insurers and consumers as
it can help reduce costs, improve the overall customer shopping
experience and help reach underserved populations who need
life insurance."
Notable Findings and Sample Insights: Understanding Medical
Risk Profiles
- Type 2 Diabetes: Among 50 million individuals
studied, 10% have type 2 diabetes. While traditionally not selected
for accelerated underwriting due to a high Standardized Mortality
Rate (SMR) of 157%, the study found that 10% of these individuals
could be good candidates for accelerated underwriting by combining
medical and non-medical data.
- Asthma: With a lower SMR of 114%, asthma represents
another condition where data integration can optimize underwriting.
The study identified that 60% of applicants with asthma could be
suitable for accelerated underwriting.
- Sleep Apnea: For applicants with sleep apnea,
having an SMR of 124%, the study revealed that 50% could be
candidates for accelerated underwriting when both data sets are
considered.
Combining Data for Better Insights
Many life
insurance companies often evaluate medical and non-medical data
separately, which can lead to missed opportunities for better
decision-making when viewed together. While this approach is
useful, it may prevent acceleration based solely on medical risk
assessments. To address this limitation, a process that
simultaneously considers both medical and non-medical data can
provide a more comprehensive understanding of an applicant's risk
profile.
By leveraging LexisNexis Risk Classifier into life
underwriting, which uses non-medical data to generate an insurance
score that can be used by carriers to categorize applicants into
lower and higher mortality risks, carriers can better identify
lower-risk segments that traditional medical data might overlook.
This approach supports faster, more accurate decisions, improving
the carrier's processes and consumer's experience in applying for
life insurance without compromising risk assessment.
Study Methodology
The study analyzed data from a
population of 50 million individuals over five years (2018-2022),
covering over 1.7 billion medical claim lines, diagnoses,
procedures and specialty data. It utilized the LexisNexis
Risk Classifier Score, incorporating non-medical data such as
driving history, credit records and public records. Standardized
Mortality Ratio (SMR) was used to compare mortality
risk across various conditions and populations, normalized for
gender, age and smoker status.
Download the 2024 Life Insurance Mortality Risk Management
Study.
About LexisNexis Risk Solutions
LexisNexis® Risk Solutions harnesses the power of data,
sophisticated analytics platforms and technology solutions to
provide insights that help businesses across multiple industries
and governmental entities reduce risk and improve decisions to
benefit people around the globe. Headquartered in
metro Atlanta, Georgia, we
have offices throughout the world and are part of RELX (LSE:
REL/NYSE: RELX, a global provider of information-based
analytics and decision tools for professional and business
customers. For more information, please
visit www.risk.lexisnexis.com, and www.relx.com.
Media Contacts:
Chas Strong
LexisNexis Risk Solutions
Phone: +1.706.714.7083
Charles.Strong@lexisnexisrisk.com
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