Underwriting questions impact client willingness to disclose conditions

New behavioural science research from the Reinsurance Group of America (RGA) indicates that unambiguous language – not just question brevity – can improve the accuracy of mental health disclosures on applications. Normalizing openness about mental health by providing a statement indicating the prevalence of mental health conditions also increased responsiveness in a trial RGA conducted with 4,049 participants.

The research, summarized in the whitepaper Improving Mental Health Disclosure for Insurance Underwriting, is based on RGA’s behavioural science research on other under-disclosed topics including tobacco use, substance use, body mass index (BMI) and medical conditions. “The way customers interpret and emotionally respond to underwriting questions plays a critical role in their willingness to disclose,” they write. “Using behavioural science-backed techniques to refine these questions can lead to increased disclosures.” 

The report notes that short and simple are not always synonymous. “True simplicity is derived not from the length of a question, for example, but from its lack of ambiguity,” they state. “While the question appears short, it places a significant burden on the applicant to interpret its meaning.” 

De-stigmatizing statements 

Listing conditions, rather than asking an open-ended question about conditions, improved disclosure rates by 17 per cent; when paired with a de-stigmatizing statement (the researchers included a statement about the prevalence of mental health conditions, emphasizing that many people actively take steps to alleviate and manage the condition), this increased the disclosure rate by another 10 per cent. 

Interestingly, the research also found that respondents claim to be most comfortable disclosing their mental health histories to an artificial intelligence (AI) chat bot – half selected this as the most comfortable option. Financial advisors, both face to face and on the telephone were identified as the least comfortable channels for disclosing mental health conditions – 22 per cent of respondents said they would be least comfortable divulging their information to an advisor. Although chatbots increase psychological distance, reducing the negative feelings associated with disclosing mental health conditions, they also present risks such as the potential for increased dishonesty.

“Understanding how people interact with technology will be a crucial area for insurers to explore as they consider integrating these tools,” they write.