Donnamarie Blake
Donnamarie Blake,
Senior Marketing Manager, Life

April 3, 2018

This is the third blog in a series on Predictive Modeling in Life Insurance

Over the past 20+ years, technology has changed life drastically for most Americans. Smartphones, for example, have not only changed the way people communicate, with each other, but how they purchase products and services.

But, when it comes to the purchase of life insurance, not much has changed. That’s because the industry overall has taken a slow approach to modifying processes to respond to consumers’ expectations for speed. Consequently, even in today’s hyper-connected world, life insurance applicants tend to encounter a traditional underwriting process, which is excruciatingly invasive and lengthy.

Innovation that Can Lead to Change—and a Competitive Edge

Historically, consumers had to accept higher life insurance premiums in exchange for a less invasive and time-consuming underwriting process. But today, life insurers that wish to stay ahead of the competition can offer their applicants a seamless, non-invasive underwriting process. How? By leveraging data and advanced analytics to use a more streamlined approach to assessing risk. And it’s all made possible thanks to predictive modeling solutions recently introduced to the life insurance industry.

One Such Solution: LexisNexis® Risk Classifier

Risk Classifier is an innovative tool designed to help life carriers provide a fast and easy process for consumers wishing to purchase life insurance—while at the same time helping insurers minimize the risks ordinarily associated with expedited underwriting.

Information in an “Instant”

How does it work? Today with Risk Classifier, a consumer simply provides their name, address and date of birth, and answers a few questions for the insurance company. The underwriter then receives risk-related information about the proposed insured in real time, enabling him or her to issue a decision within minutes or hours rather than days.

For life carriers leveraging this predictive modeling solution, Risk Classifier has taken the dropout rate down to almost zero. Risk Classifier has enabled these innovative insurers to meet the fast-paced demands of today’s technology-driven consumers, which has given them an edge in the life insurance marketplace.

The Need for Coverage is Tremendous

According to Robert Kerzner, president and CEO, LIMRA, LOMA and LL Global, while there has been growth in the number of American households that have life insurance in place since 2010, “… more than 37 million American families are completely uninsured and at financial risk if their primary wage earner dies unexpectedly.”[1] That’s a lot of opportunity for insurers. And the insurers that may be best positioned to tap into that need for protection may be those that are willing to satisfy consumers’ demand for speed and efficiency in the underwriting process.

Many Carriers are Already Leveraging These Innovative Tools

Because of valuable tools like Risk Classifier, the life industry has begun to embrace change and move away from the practice of doing the same thing over and over again, while expecting different results. Many life insurers have started to realize, appreciate and leverage the fact that they have access to valuable tools that can enhance both the customer experience—and their bottom line.

Related articles

LexisNexis Risk Classifier: A Preview

[1] Source: “LIMRA: Nearly 5 Million More U.S. Households Have Life Insurance Coverage, LIMRA, Sept. 29, 2016–nearly-5-million-more-us-households-have-life-insurance-coverage-300335782.html