Underwriting Requirements Optimization Study
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The process of life insurance underwriting is a time consuming and expensive process.
Swiss Re is dedicated to offering solutions that are accelerated, automated, more efficient, and less expensive. This study aims to help carriers increase the percentage of automated cases by identifying certain types of applicants that could be underwritten without referring to an underwriter or ordering additional requirements. Swiss Re partnered with a carrier, who provided underwriting insights from their 2019 accelerated program, roughly 6k application records1. We found that about 60 percent of those cases were referred to an underwriter for review. Applying a combination of underwriting subject matter expertise and a predictive model to group applicants according to risk groups, the model was then trained to determine which applicants did not need to be referred. The following highlights the unmistakable value of collaboration between data scientists and underwriting experts.
In conducting the study, we established a methodology that focused on four primary tenets: exploratory analysis, data preparation, model and testing and conclusions impact. Our exploratory analysis sought to understand the dataset to identify potential area(s) of opportunity. During the data preparation stage, we took the extract unstructured data, simplified the dataset to remove any noise, and generated applicant cohorts. Following, the model needed to be trained and have its performance evaluated. Lastly, we assessed the business impact and presented recommended steps for implementation.
By analyzing midsized life insurance carrier accelerated data, we identified several opportunities to minimize referrals and accelerate more applicants.
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