Accelerated underwriting (AUW) in individual life insurance has gained momentum in Canada since it emerged in 2017, according to an article by Munich Re. The reinsurer observes that the COVID-19 pandemic, which began in 2020, has encouraged the adoption of this type of insurance underwriting, which does not require the collection of bodily fluids or medical tests on the person to be insured.
Published by the reinsurer in April 2025, the article is entitled Accelerated underwriting trends: A Canadian market perspective. "In 2017, only one Canadian insurer offered an AUW program. By 2023, this increased to 10 insurers, with additional companies looking to develop their own programs in the future," explains the author, Bridget Guan, Manager and Actuary, Individual Life Reinsurance Solutions, Munich Re, Canada.
In her article, Guan defines accelerated underwriting as a program whereby certain underwriting requirements are not required “for a subset of applicants that meet favourable risk requirements.”
She explains that some insurers use models to gauge the likelihood of smoking, or to detect misrepresentation of body mass index. Some add a medical file review to compensate for the absence of biometric data.
If the models detect an anomaly, the insurer will demand additional proof. It will then apply what Guan describes as traditional full underwriting.
She adds that customers can also be selected for Random or Targeted Holdouts. “Holdouts are cases in the No Fluid underwriting workflow that are selected for additional requirements,” she explains, adding that "in Canada, holdouts are most commonly implemented for face amounts over $500,000, at levels of approximately 10% of policies submitted for Random Holdouts, and 14% for Targeted Holdouts.”
Better experience
Guan says that the growth of accelerated underwriting has helped improve the experience in tangible ways, by making the transaction faster and less intrusive for customers. She adds that the adoption of accelerated underwriting has enabled insurers to offer this better experience to more people “through higher No Fluid limits.”
According to data presented by Guan, the limit on the amount of insurance issued without fluids rose from $1 million in 2017 to $5 million in 2023. Verified on June 25, 2025 via the InsuranceINTEL product information centre, the $5 million limit remains customary in the industry.
During the same period, the percentage of the amount of insurance that was issued without fluid sampling or medical tests rose from 29% to 54% of the total amount of insurance issued.
The increase in the proportion of the amount of insurance issued without fluids has also led to a reduction in the time taken to process fully underwritten applications, as shown in the following graph.
Anti-selection
"This increase is not without risks, however. For example, one ever-present concern when liberalizing underwriting requirements is the risk of anti-selection," points out Guan. She describes anti-selection as when an applicant or advisor uses knowledge of the health status of the person to be insured to his or her advantage, knowing that fluids will likely not be collected.
Guan notes that even though the majority of insurers no longer require fluids as a condition for issuing a policy, policy placement rates have remained steady. The placement of a policy means that it has been accepted by the customer.
Munich Re data for 2023 show that 80.8% of policies were placed that year. Of the policies placed in 2023, 76% were placed at regular risk (standard, in underwriters' jargon). Also in 2023, the refusal rate was 8% and the loss of business rate 11%.
“This is one possible indication that the risk mitigants introduced by insurers have been effective at identifying the right risks,” states Guan.
A Munich Re spokeswoman told Insurance Portal that the data collected by the reinsurer relates to all individual life insurance products, and that Bridget Guan cannot therefore comment on the use of accelerated underwriting specifically for term products.
For its part, InsuranceINTEL reveals that the limit on the amount of insurance that can be issued without fluids or exams varies from one insurer to another.
For participating whole life, Canada Life, Manulife and Sun Life offer up to $5 million of insurance coverage through accelerated underwriting. Equitable Life sets its limit at $3 million. Several insurers have set theirs at $2 million. These include Assumption Life, Desjardins Insurance, Empire Life and iA Financial Group. Foresters Financial, Co-operators Life and RBC Insurance do not offer whole life with accelerated underwriting. Beneva, CUMIS Life, BMO Insurance, ivari and UV Insurance do not offer participating whole life insurance.
For non-participating whole life insurance, BMO Insurance, Canada Life and Sun Life offer an insurance coverage limit of $5 million under accelerated pricing. Assumption Life, Beneva, Desjardins Insurance, Empire Life and iA Financial Group set their limits at $2 million. Foresters Financial and UV Insurance do not offer non-participating whole life insurance on an accelerated underwriting basis. Co-operators Life, CUMIS Life, Equitable Life, ivari, Manulife and RBC Insurance do not offer non-participating whole life insurance.
For universal life insurance, BMO Insurance, Canada Life, Manulife and Sun Life offer an accelerated underwriting limit of $5 million. Equitable Life offers up to $3 million in coverage. Beneva, iA Financial Group and RBC Insurance set the limit for the amount of insurance available via accelerated underwriting at $2 million. ivari sets the limit at $1 million, and Desjardins Insurance at $500,000. CUMIS Life and The Co-operators do not offer accelerated underwriting for universal life insurance. Assumption Life, Empire Life, Foresters Financial and UV Insurance do not offer universal life insurance.
For Term 10 (T10) insurance, BMO Insurance, Canada Life and Manulife offer up to $5 million in coverage via accelerated underwriting. Equitable Life offers a $3 million limit. Empire Life does too, but only for policyholders aged 0 to 17. The insurer reduces its limit to $1 million for those aged 18 to 50. The following insurers have set their limits at $2 million: Assumption Life, Beneva, Desjardins Insurance, iA Financial Group and RBC Insurance. Ivari offers accelerated underwriting up to $1 million in coverage.
For its part, Sun Life replied to InsuranceINTEL that information is forthcoming as to whether its Sun Life T10 Evolve Term Life will offer accelerated underwriting and up to what limit. The insurer does not offer preferred pricing on its T10 Sun Life Go Term Life.
CUMIS Life, Co-operators Life, Foresters Financial, Humania Assurance and UV Insurance do not offer T10 accelerated underwriting. However, Humania told InsuranceINTEL that instant issuance of its T10 is possible directly on its platform, up to a maximum amount of $1 million.
Still a long way to go
Bridget Guan believes that the industry still has some way to go. In her article, she recalls that the increase in fluid-free thresholds was intended to increase the rate of business processing without human intervention. “but actual straight-through processing (STP) rates have plateaued at around 25% in 2023.”
Guan notes that a large proportion of accelerated underwriting applications still require human review or additional evidence. But the addition of “new underwriting analytics models and third-party data sources, can help insurers work towards bridging the difference between their targeted and actual STP rates to truly accelerate underwriting,” she writes.
This article is a Magazine Supplement of the July issue of the Insurance Journal.
