Trending in 2017: Life Insurance Firms Streamline Underwriting Process

by on Dec 05, 2017

As 2017 comes to an end, we’re looking back at some of the year’s financial industry trends. This post is part of a series examining notable patterns and highlights.

As newer companies like Quilt, Ladder and Fabric promise quick and simple applications, established firms are launching initiatives to speed their own application processes for traditional products. Expediting the traditionally slow underwriting process is one way to reduce the hassle associated with life insurance purchases and encourage prospects to commit to a policy. Below, we review capabilities launched this year from MassMutual, USAA and John Hancock that affect the underwriting processes. As firms like Allianz and Northwestern Mutual commit to investing in tech startups, we expect to see more underwriting innovations in 2018.

For traditionally sold products, MassMutual made substantial changes in the hopes of expediting the underwriting process. The firm has significantly increased algorithmic underwriting, expanding it to 90% of applications after gradually implementing algorithms over the past two years. In messages to advisors, MassMutual promotes the combination of eSignature and algorithmic underwriting as a way to decrease the timeframe for prospects to receive formal offers. In July, 75% of applications used eSignature, and the firm aims to increase that number to more than 90%.

MassMutual Advisor Site Homepage Image

MassMutual is also increasingly focusing on client medical interviews with its new MassMutual Mortality Score. The calculation strategy predicts mortality faster and more accurately using data from interviews. Advisor messages note that healthy applicants complete client medical interviews in five or six minutes, decreasing the time spent on the application process.

USAA also changed the way it assesses applicant health, integrating electronic health records without using a doctor as an intermediary. Prospects with health records at the Department of Veteran Affairs, Department of Defense or Kaiser Permanente can allow USAA employees to view their records rather than asking a doctor to send them. The firm anticipates that the recently launched option will lower barriers to life insurance ownership by expediting the application process.

Department of Veteran Affairs Health Website

John Hancock similarly promotes underwriting changes as a way to decrease application time. The firm automatically considers prospects who apply through the new eTicket application submission process for expedited underwriting. Eligible applicants receive ExpressTrack underwriting decisions, which are issued in as few as three days and do not require any medical examination.

John Hancock Advisor Homepage Image

Corporate Insight’s Life Insurance Monitor service tracks leading insurers and industry trends. For more about recent innovations, check out our latest blog posts on 2017 rewards programs, feedback communities and chatbots.