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Gen Re is pleased to share this summary of key highlights from our 2024 Individual Life Accelerated Underwriting Survey. Since the inception of the survey in 2021, Gen Re has collaborated with with carriers, through an initial Steering Committee and a newer AU Study Group, to help guide the study framework and content.
Thirty-eight Individual Life insurance carriers participated in this study. Gen Re recognizes that carriers may be at varying stages of implementation with their Accelerated Underwriting workflow.
Most companies (82%) have either a fully implemented or a partially implemented AU workflow. Ten percent do not currently utilize an AU workflow, but plan to implement one in the next two years. Three companies reported that they do not currently have, nor do they plan to implement, an AU workflow at this time.
For those companies with fully implemented workflows, the length of time a workflow has been in place ranged from less than one year up to 11 years. Companies with partially implemented workflows have typically had pilot programs in place for less than two years.
|
Length of Time Workflow Has Been in Place |
Number of Companies |
|---|---|
|
Partially Implemented <1 year – 3 years |
1 |
|
Fully Implemented <1 year – 3 years |
10 |
|
Fully Implemented 4 years – 6 years |
13 |
|
Fully Implemented 7 years – 10 years |
8 |
Companies that do not currently utilize an AU workflow noted technology barriers, mortality slippage concerns, low application volume, cost of implementation, agent acceptance, and limited resources as reasons they are unable to implement a program at this time.
For many companies, an AU path remains mandatory for agents and clients if the application meets eligibility requirements. Some companies allow the agent and/or client to choose an AU path, although most systems automatically opt‑in an application, and require the agent to manually opt‑out if they wish to do so.
Participants were asked to rank their top three AU goals when first implementing AU, and then rank their current workflow goals. Year over year, reducing time to issue remains the top AU workflow goal for most companies. Meeting consumer expectations and managing mortality slippage continue to rank highly as well.
Most companies (81%) report meeting their AU goals. Only one company reports exceeding their goals, while 16% report missing them.
The majority (94%) of participating companies use AU throughput percentage for tracking the success of their AU workflow. Other commonly used metrics include days to issue, mortality slippage, and placement rates.
Companies typically offer four non-tobacco and two tobacco underwriting rate classes (standard or better) through their AU workflow. The number of non-tobacco rate classes ranged from a low of three to a high of eight. For tobacco rate classes, the number ranged from a low of one to a high of three.
|
Implementation Status |
AU Workflow |
Full Underwriting Workflow |
||
|---|---|---|---|---|
|
|
# of non-tobacco classes |
# of tobacco classes |
# of non-tobacco classes |
# of tobacco classes |
|
Overall |
4 |
2 |
4 |
2 |
R = 32
On average, companies that have an AU workflow see an improvement of 18 business days from application submission to final decision compared to full underwriting workflows. Out of the 31 companies responding, the average number of days from application submission to final underwriting for AU workflows is 5 days, while the average for full underwriting is 23 days.
For policies that receive an AU approval, the time that elapses from application submission to final underwriting offers varies greatly by company. Only 20% of AU applications are automatically approved.
Of the total Individual Life applications processed, 57% were eligible for AU. Of those eligible applications, 14% were approved through an automated workflow and 36% were approved with human underwriter review.
The average percentage of AU eligible applications sent through an automated workflow was 17%. Eighty-three percent of applications are typically auto-approved, while 9% are auto-declined. An average of 8% of applications are noted as being incomplete, withdrawn, postponed, or pending.
Eighty-three percent of AU eligible applications require some level of human underwriter review. Forty-three percent are approved and 8% are declined without additional requirements being ordered. Thirty-nine percent of applications that cannot be approved or declined are sent back to full underwriting (paramedical exam/fluid check). Some applications (10%) cannot be approved or declined simply by underwriter review and require additional underwriting sources, such as an Attending Physician’s Statement (APS).
Almost all (94%) companies offer a Term Life product through their AU workflow. Other Individual Life products eligible for AU include Whole Life (56%) and Universal Life (63%).
When asked about AU program material exclusions not related to underwriting guidelines, 59% of companies reported that they do have exclusions, while the remaining 41% do not. Common exclusions include: state (specifically New York and Colorado), certain products, application type, citizenship, and distribution channel.
|
Term Life |
Average |
Median |
Low |
High |
|---|---|---|---|---|
|
Minimum Issue Age |
18 |
18 |
17 |
25 |
|
Maximum Issue Age |
57 |
60 |
45 |
65 |
|
Minimum Face Amount |
$104,833 |
$100,000 |
$10,000 |
$250,000 |
|
Maximum Face Amount |
$1,891,667 |
$1,500,000 |
$500,000 |
$7,500,000 |
R = 30
|
Whole Life |
Average |
Median |
Low |
High |
|---|---|---|---|---|
|
Minimum Issue Age |
18 |
18 |
0 |
21 |
|
Maximum Issue Age |
59 |
60 |
45 |
80 |
|
Minimum Face Amount |
$62,778 |
$50,000 |
$10,000 |
$100,000 |
|
Maximum Face Amount |
$1,708,333 |
$1,000,000 |
$250,000 |
$7,500,000 |
R = 18
|
Universal Life |
Average |
Median |
Low |
High |
|---|---|---|---|---|
|
Minimum Issue Age |
17 |
18 |
0 |
25 |
|
Maximum Issue Age |
58 |
60 |
45 |
65 |
|
Minimum Face Amount |
$82,500 |
$50,000 |
$10,000 |
$100,000 |
|
Maximum Face Amount |
$2,275,000 |
$2,000,000 |
$500,000 |
$7,500,000 |
R = 20
Forty-four percent of companies report using a Behavioral Economics (BE) approach in developing AU application questions. Companies that have BE approaches in place typically partner with reinsurers and/or research and data analytics teams for guidance, with 36% of companies tracking disclosure rates before and after implementing BE tactics.
Ninety-one percent of participants either currently use or plan to implement pre‑/post-issue auditing/underwriting in association with their AU workflow. The remaining 9% of companies do not plan to implement pre‑/post-issue controls.
Sixty-three percent of companies use random holdouts as a control measure throughout their AU workflow. Other common controls in place include post-issue APS (47%), and post-issue EHR (41%).
Companies were asked to estimate the percentage of AU applications/issued policies that underwent the above control procedures during 2023. Post-issue agent monitoring was noted as the most frequently used control.
Over half (56%) of companies estimate mortality slippage associated with their AU program through random holdouts. Thirty-eight percent are monitoring early claims experience, 34% utilize post-issue APS, and 16% utilize retrospective studies. Three companies reported they are not estimating mortality at this time.
Most companies continue to review their AU workflow rules for modification on an as needed (25%) or monthly basis (22%).
The remainder of companies review their rules quarterly (19%), annually (13%), or bi‑annually (10%). How often companies review their AU workflow rules for modification remains consistent from year to year.
Approximately one-third (34%) of participating companies have made material changes to their AU workflow over the past 12 months. The most prevalent changes included the addition of new data sources, simplified applications, the introduction of model-based automated decisioning, and expanded eligibility qualifications (e.g., increased face amounts, updated risk criteria).
Eighty-one percent of participating companies handle AU workflow changes internally. Thirty-five percent handled changes in partnership with a reinsurer and 16% handled changes in partnership with a vendor or consultant.
Download the PDF version for a list of participating companies and more information about the survey definitions.
