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Gen Re is pleased to share this summary of key highlights from the U.S. 2023 Individual Life Accelerated Underwriting Survey. Since the inception of the survey in 2021, Gen Re has collaborated with a Steering Committee of interested carriers to review the study framework. Much of the important feedback received during that process is reflected in the content detailed in this comprehensive report.
Fifty-three Individual Life insurance carriers participated in this study. Gen Re recognizes that carriers may be at varying stages of implementation with their Accelerated Underwriting workflow.
Most companies (78%) have either a fully implemented or partially implemented AU workflow. Thirteen percent do not currently utilize an AU workflow, but plan to implement one in the next two years. Five companies reported that they do not currently have, nor do they plan to implement, an AU workflow at this time.
For those companies with fully implemented workflows, length of time a workflow has been in place ranged from less than one year up to 10 years. Companies with partially implemented workflows have typically had pilot programs in place for less than three years.
|
Length of Time Workflow Has Been in Place |
Number of Companies |
|---|---|
|
Fully Implemented <1 year – 3 years |
11 |
|
Fully Implemented 4 years – 6 years |
17 |
|
Fully Implemented 7 years – 10 years |
8 |
|
Partially Implemented <1 year – 3 years |
5 |
Companies that do not currently utilize an AU workflow noted technology barriers, outdated legacy systems, staffing issues, budget constraints, low application volume, and lack of profitability as reasons they are unable to implement a program at this time.
For many companies, an AU path remains mandatory for both agents and clients if the application meets eligibility requirements. Some companies allow the agent and/or client to choose an AU path, although most systems automatically opt‑in an application, and require the agent to manually opt‑out if they wish to do so.
Participants were asked to rank their top three AU goals when first implementing AU, and then rank their current workflow goals. Year over year, reducing time to issue remains the top AU workflow goal for most companies. Meeting consumer expectations, managing mortality slippage, and reducing costs all continue to rank highly as well.
On average, companies that have an AU workflow see an improvement of 18 business days from application submission to final decision compared to full underwriting workflows.
|
AU Workflow |
Full Underwriting Workflow |
||
|---|---|---|---|
|
Median # of days |
Mean # of days |
Median # of days |
Mean # of days |
|
6 |
9 |
24 |
27 |
R = 38
Companies typically offer four non-tobacco and two tobacco underwriting rate classes (standard or better) through their AU workflow. The number of non-tobacco rate classes ranged from a low of one to a high of eight. For tobacco rate classes, the number ranged from a low of zero to a high of three.
|
Implementation Status |
AU Workflow |
Full Underwriting Workflow |
||
|---|---|---|---|---|
|
|
# of non-tobacco classes |
# of tobacco classes |
# of non-tobacco classes |
# of tobacco classes |
|
Overall |
3 |
2 |
4 |
2 |
R = 41
Almost all (95%) companies offer a Term Life product through their AU workflow. Other Individual Life products eligible for AU include Whole Life (63%) and Universal Life (63%).
Only 28% of companies report using a Behavioral Economics (BE) approach in developing AU application questions. Companies that have BE approaches in place typically partner with reinsurers and/or research and data analytics teams for guidance.
Ninety-three percent of participants either currently use or plan to implement pre‑/post-issue auditing/underwriting in association with their AU workflow. The remaining 7% of companies do not plan to implement pre‑/post-issue controls.
Sixty-three percent of companies use random holdouts as a control measure throughout their AU workflow. Other common controls in place include recissions (51%), post-issue APS (44%), and post-issue auditing (39%).
Fifty-nine percent of companies estimate mortality slippage associated with their AU program through random holdouts. Thirty-seven percent are monitoring early claims experience, 32% utilize post-issue APS, and 10% utilize retrospective studies. Seventeen percent listed other methods for estimating mortality. Two companies reported they are not estimating mortality at this time.
Most companies continue to review their AU workflow goals on an as needed (24%) or monthly basis (23%).
The remainder of companies review their rules quarterly (19%), annually (19%), or bi‑annually (10%). Two companies noted that they currently review their workflow rules weekly as they are in the early stages of implementing AU.
Approximately half (54%) of participating companies have made material change to their AU workflow over the past 12 months. The most prevalent planned changes to AU workflows in the next two years include the addition of data sources, modifications to face amounts, and modifications to algorithms.
Download the PDF version for a list of participating companies and more information about the survey definitions.
