Sun Life studying whether credit scores could be useful in underwritingBy The IJ Staff | November 14 2017 07:00AM
Could credit scores have a predictive value on determining subsequent mortality experience? Dean Connor, President and CEO of Sun Life, explained how his company is exploring this question.
“You can get data and look at it retrospectively, which is what we’re doing. You look at credit scores of people who bought insurance going back a number of years and then you go back and look at the actual experience...That’s a lot of data analysis, but that’s what you have to do. You have to go back and back test it.
He underlined that using credit scores in underwriting life insurance is “not in production” at Sun Life. “This is under the heading of what might happen in the future.”
He added that credit scores is just one type of data that is currently being experimented with to see how the underwriting process could be made more efficient. A mixture of actuaries and data scientists are analysing such data for Sun Life.
New role for actuaries
Connor says it is interesting to observe that due to the growing interest of insurance companies in data analytics, actuaries are taking on new research as the industry pursues innovation. “Actuaries are originally trained in data science and somewhere along the road we get them calculating reserves and pricing,” says Connor. “But I think you are going to see, in the future, actuaries getting reinvolved – more so than ever before – in data research, data analysis, data analytics and artificial intelligence, which I think will be great for the actuarial profession.”