The underwriting manual of the future

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This article was first published in the March 2022 issue of On The Risk, the Journal of the Academy of Life Underwriting. Underwriting manuals have been around for a long time. Originally, they were large that were kept on the underwriter’s desk. They evolved through floppy disk and CDs to the sophisticated e-tools of today live in a cloud somewhere. At their most basic they are a means to serve up multiple documents that record the firm’s underwriting philosophy, but these days they typically go far beyond that. In this article we turn our thoughts to the trends and issues…

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India: our underwriting automation survey

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Towards the end of 2021 SelectX, in partnership with EXL Service, surveyed life insurers in India to gauge progress along the pathway of automated underwriting. Here we give an overview of the results and put them in context. Our survey of Indian life insurers regarding their current practice and their views on the future took place last year. We approached all 24 firms operating in the market and received responses from 11. That, we admit, was a bit disappointing, but we know how busy companies are and, looking at the group that did respond, we believe that they represent a…

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On being an expert witness: a postscript from America

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As a follow-up to our original article published last December, highly regarded veteran underwriter Tom McCarthy looks at the subject of expert witness work from a US perspective. As per the previous article, qualifying as an expert witness in the US is largely dependent on experience, credentials and even reputation. Fulfilling the role effectively is connected largely to these areas; hence expert witnesses typically have extensive experience in the fundamentals of underwriting and insurance. This experience factor also connects to a historical perspective which can be valuable in many situations where the expertise is sometimes linked to the time period…

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On being an expert witness

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Acting as an expert underwriting witness, either in legal actions or arbitration processes, can be interesting work. Usually, such cases arise through policyholders being dissatisfied with non-payment of claims, but sometimes it is the insurer which is the aggrieved party, maybe suing a distributor or a service provider. What follows is based on our experience of acting as an expert witness, and thus reflects the British (and Irish) legal systems, but the principles are likely applicable elsewhere too. In the UK and Ireland there is an insurance and financial services ombudsman respectively, and thus the cases that go to law,…

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Applying artificial intelligence to underwriting

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In our first article we looked at some of the basic terminology used around the umbrella term artificial intelligence (AI). In our second we take a deeper dive into an area which we think has huge potential in underwriting and claims. This is the world of optical character recognition (OCR), natural language processing (NLP) and text mining. As we have said previously, the amount of data and indeed data sources available to underwriters is expanding rapidly. To make sense of this information, underwriters and claims technicians need appropriate techniques to use the data: sifting through what there is, establishing what…

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Underwriting automation: the right tool for the job

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Automating the underwriting process holds great potential, but to realise that potential you need the right product or products. There are plenty of software suppliers and plenty of decision engines out there but there is a big range of capabilities too. Some have theoretical capability. We worked with an insurer looking to overhaul its back office and introduce on-line submission of applications with automated underwriting. Its admin software supplier said it had a decision engine too and so the insurer decided to adopt it – only the engine turned out to be a basic ‘shell’ with limited capability and nothing…

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AI demystified – what’s the buzz?

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Having been to several conferences, both in person and virtually, in the last couple of years and attended sessions which have included AI in the title, we have been disappointed by what we have seen and heard. All too often the use of the term has been misleading and suggesting an attempt to grab attention. We have started to wonder at what points management information (MI) or business intelligence (BI) becomes predictive modelling (PM) and then becomes machine learning (ML) and, to be honest, we have been struggling to make sense of it all. To be blunt, there seems to…

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Noisy underwriting

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Noisy underwriting? It’s when you give two underwriters a less than straightforward case to assess and they arrive at different decisions – maybe very different. Or if you asked an underwriter to assess a risk that he or she processed a while back, and the decision second time round is different from the first. Why might underwriting decisions might vary between individuals or within the work of the same underwriter? Different skill levels? Different intelligence levels?  Variations in mood? (Might Monday morning decisions differ from Friday afternoon ones? Or be influenced by a recent argument with a spouse/partner or friend…

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Hypertension: Some re-thinking called for?

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Hypertension, or high blood pressure, is a common medical problem. It can be caused by a number of other medical conditions such as chronic kidney disease, thyroid disorders and other hormonal upsets, and a rare adrenal gland tumour called phaeochromocytoma. But most of the time hypertension has no obvious cause, although sometimes it is associated with overweight or a diet with an overly high salt content, and people of Afro-Caribbean heritage seem to be more susceptible to it. If left unchecked, high blood pressure can damage kidney function, enlarge the heart and accelerate the process of arterial degeneration; thus hypertension…

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Underwriting automation: Continuing the journey

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When you have deployed an underwriting engine, that is not the end of the journey. Quite the opposite: it is just the beginning. You will have done extensive testing before launch to check that the rules are applying the same underwriting philosophy as your human underwriters, so you can rightly have a lot of faith in the original set-up. However, you can’t test absolutely everything – every possible case, every possible scenario – so there is a need to monitor what the engine is doing, and in particular how the rules are working. If something is not quite right, some…

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