PR FEED

Michael Correa, SVP, Reinsurance Solutions & Carrie Lam, AVP, Client Experience sat down for a filmed conversation about accelerated underwriting and the implications of its continued evolution and use throughout the life insurance industry. They further expanded on these important themes in a written article.  View the videos and read their commentary on our website.

Accelerated underwriting (AUW), a growing practice even before the pandemic, is now firmly established in the life insurance application process. AUW is the waiving of certain traditional underwriting requirements (e.g., fluid evidence, vitals) for a subset of applicants that meet favourable risk requirements in an otherwise fully underwritten life insurance process. While the interpretation of AUW can vary from one insurance company to the next, what is universal is that the “no fluid” aspect of AUW translates into a faster, less invasive buying experience for the majority of life insurance applicants.

But giving up underwriting evidence for speed is not without risk for insurers. Less evidence translates to diminished confidence in the health of the applicant, which can throw the “risk versus reward” formula off-kilter if other risk-mitigating steps aren’t taken.

As the industry continues to develop, refine, and expand AUW, it is imperative that we consider the implications and address the challenges of these programs. The entire industry has a role to play in ensuring the sustainability of AUW in Canada, from enforcing good risk management practices to challenging ourselves to rethink product and underwriting designs. Insurers must be confident in their underwriting while still delivering the same value to customers at speeds they now expect, all while managing their risk exposure. How do we strike this balance?  Continue reading or watch the videos here.