Our thoughts

By Gary Bundock and Tom McCarthy It is interesting (well, we think so) to reflect on how evidence requirements differ from market to market. In some places – and the UK is a good example – one can buy what might seem a huge amount of cover on the basis of an application form only. Yet elsewhere virtually every application, certainly for pure life cover, needs a medical exam of some kind. And often, lab tests and maybe an ECG as well. The considerable differences between markets in terms of underwriting practice are due to a variety of factors, such…

By Peter Maynard I always remember being told, early in my underwriting career (I’ll leave you to guess when that might have been), that it was the duty of the underwriter to accept as many cases as possible at the ordinary (standard) rate of premium – while maintaining equity between policyholders, of course. This was in the interests of inclusivity: making affordable insurance available to as wide a group as possible. And in many markets, certainly the UK, that goal was faithfully achieved: 95% (or even more) of applicants accepted at standard, 1% or less declined or postponed, and the…

As ever, change is constant, but these days we all notice it more because the pace of change is quicker and still accelerating. In the 1990s one could look back and find that life and disability underwriting was little different from how it had been 50 years before. In fact, SelectX was formed getting on for 20 years ago with the aim of prodding the industry towards better ways of doing things and moving underwriting truly into the 21st century. Today, encouraging companies to innovate is largely unnecessary: they get the need. Instead, they need pushing onto the up-escalator of…

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…

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…

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…

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,…

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…

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…

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…