Exam completion rate case study

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By KATIE PALKA, July 9, 2019

One of the challenges facing the direct-to-consumer segment of the life insurance industry is improving completion percentage. Over the last year, we analyzed our client’s data to compare how and where applicants schedule exams, and measure the impact on completion rates. Three common factors emerged to demonstrate the effectiveness of utilizing some of ExamOne’s tools and solutions.

The challenge

One of the challenges facing the direct-to-consumer segment of the life insurance industry is improving completion percentage. This means more applicants into underwriting, increased premium payments and more families protected.

How can ExamOne help directmarketers with these common issues?

  • Lost premiums due to fall-out fromunresponsive applicants
  • Applicants find the examprocess inconvenient

The solution

When looking to improve applicant completion rates, direct marketers have turned to ExamOne’s suite of solutions. Our goal is to simplify the scheduling process and offer applicants more exam location choices.

The results

ExamOne analyzed our client’s data* to compare how and where applicants scheduled exams impacted completion rates of policies. Three common factors emerged to demonstrate the effectiveness of utilizing some of ExamOne’s tools and solutions—convenient exam centers, scheduling tools, and the combination of these two.

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Place More Business And Get Paid Commissions Faster Using Life Standard Data Messages

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By Ken Leibow, InsurTech Express

 

It’s easy to think that this is over simplified, but if you want to place more life insurance business and get paid commissions faster, then you need to eliminate paper! Use eApp instead of submitting a paper application; don’t send licensing and contracting forms via mail or email—do it electronically on a platform like SureLC by SuranceBay; eDeliver life policies rather than mailing or hand delivering paper policies; and process commissions from a carrier’s commission data feed instead of manually using paper commission statements. Trading partners in the life insurance industry have their administration systems and distribution platforms interconnected by using insurance data exchanges that move data seamlessly via standard messages. What you get is speed, accuracy and reduced labor costs.

 

Accelerate Cycle Time with eApp and eDelivery
There are several ways to submit life business electronically such as using an eApp or eTicket platform plugged into one or more fulfillment models like a tele-interview, accelerated underwriting or predictive underwriting with auto-issue. Whether the agent is submitting the business on a single carrier platform like CBLife QuickApp or a multi-carrier platform like iPipeline iGO, the data is being transmitted to the fulfillment center or directly to the carrier using a standard data message. This data automatically populates the recipient’s admin system in good order, auto-creating the case and triggering requirement ordering or ultimately policy issue. Cycle time compared to processing paper is at least 60 times faster resulting in up to 85 percent placement of paid business.

Delivering life policies electronically (eDelivery) benefits carriers, agencies, agents and consumers. The cost savings are huge; there is also a decrease in NTO rates, better customer experience, tighter legal and compliance control, and commissions are paid faster. Here are some impressive eDelivery statistics:

  • 70 percent reduction in cycle time.
  • 55 percent of the eDelivered polices are being completed within 48 hours.
  • Consumer opt out rate is below 10 percent.
  • 95 percent of agents repeat use (Stickiness).
  • Reissue time is significantly decreased.
  • Eliminates the cost of postage and transportation.
  • Higher placement rate (ePayment).
  • No need to chase down delivery requirements.

A Revolution In Underwriting

The race to develop accelerated products has driven life insurers to cautiously embrace the next generation of data.

By, Jeff Roberts senior associate editor at AM Best

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The sweeping letter was a warning to the industry.

It spilled over six single-spaced pages and 2,000 words, putting life insurers on notice for the emerging use of unconventional data in their automated underwriting.

Data such as criminal and civil judgments. Credit information. Retail purchase history. Internet and mobile device usage. Geographic location tracking. Even social media and facial analytics, sources rarely used now but expected to be widely adopted in coming years.

After an 18-month investigation into insurers’ underwriting practices, the New York State Department of Financial Services leveled a stern warning: Apply external data only if you can justify its actuarial validity and independently verify it does not discriminate or contain prohibited criteria.

But also tucked into that guidance was approval for using third-party data that has “the potential to result in more accurate underwriting,” the January letter read.

And with that, the influential regulator became the first to establish specific guidelines just as the exploration and application of nontraditional data in algorithms soars.

“The gist of that letter was insurance companies couldn’t outsource whether [the data] was discriminatory to the vendor. It was on them, so they better know what they’re doing,” said Tom Scales, head of life and health insurance at Celent.

The race to perfect fully underwritten, accelerated products using algorithms, predictive modeling and analytics as a substitute for paramedical exams and fluid tests has driven life insurers to increasingly embrace new forms of data.

Leveraging it enables carriers to provide a shorter, cheaper and more customer-friendly approval process amid rising consumer expectations in an Amazon world.

But that emerging data carries a host of privacy and regulatory concerns. It also presents accuracy and reliability issues that need to be addressed.

However, accelerated underwriting and external data remain “the No. 1 topic” in the industry, Scales said. “How can we change the way we underwrite? How can we do instant underwriting?”

Using alternative data from new sources such as social media and other digital footprints is “the next big thing” in life underwriting, said Mike Vogt, executive director of data, analytics and machine learning for technology consulting firm SPR.

“We are at the beginning of the curve with how insurers are applying unconventional data,” he said. “The biggest change and the biggest risk will be the information that we gather from social media and [artificial intelligence] will actually lead to more accurate risk predictions—at the expense of privacy.”

About 25 U.S. insurers offer accelerated underwriting using nontraditional data streams, and several more are testing platforms.

The objective is to skip the invasive medical tests whenever possible without losing precise risk assessment and fraud detection.

“It’s a game-changer. Unless there’s a regulatory challenge, we’re 24 months from everybody doing it at a fully-underwritten price, at least up to a certain age, because your competitor is going to do it,” Scales said. “That’s the heart of all this. It’s not simplified issue.

“This is the same price as a regularly underwritten product. It’s just underwritten differently. It’s part of an ecosystem change.”

Insurers are using data analytics tools such as LexisNexis Risk Solutions, TransUnion TrueRisk Life Score and MassMutual’s LifeScore360 to cull data and supply a mortality score from a wealth of sources.

Think of those scores as the mortality version of credit scores in the mortgage loan process. They have developed over the past five years, and in the case of LexisNexis, include information from more than 20,000 databases.

Meanwhile, a new frontier of alternative data is emerging from social media, facial analytics, retail purchases, public filings and epigenetics—the study of how environment and lifestyle choices such as diet, exercise and substance use influence mortality at the molecular level—to further understand and price risks. One day, genetics could join them.

The products people buy, the services they use and even the magazines they read can be highly predictive of policyholder longevity, analysts say. And so can the things they say and the photos they post on social media.

Only a “small handful of carriers” are using such information, said Samantha Chow, senior life insurance and annuity analyst at research and advisory firm Aite Group. But many insurers are exploring them.

“You’re talking about everything from scoring data to social data to data from selfies and DNA,” she said. “Over the next couple of years, you’ll see people utilizing more advanced scoring methodology using this type of data.

 

“How soon depends. How scary is it? It’s not about changing how they underwrite. It’s about being more accurate in their underwriting, pricing and improving the overall experience.