What will drive APAC's next breakthrough in data-driven underwriting?

Life and health (L&H) insurers are increasingly turning to digitalisation and automation to keep pace with customer demands for a seamless insurance journey. Underwriting, often perceived as a time-consuming process that causes friction in the customer experience and discourages insurance take-up, is one area where there is still significant room for progress. 

Many insurers have adopted automated underwriting engines to process first-level data obtained from applicants’ voluntary disclosures.¹  However, the highly technical and tedious work of extracting information from second-level evidence, such as medical reports, still falls squarely on the shoulders of expert human underwriters. We believe this could soon change when the adoption of electronic health records (EHRs) gains traction worldwide.

EHRs represent the gold standard for L&H product underwriting. Together with customer-provided disclosures, they can create the holistic risk picture required for accurate underwriting decisions. 

In addition to being a direct source of verified records from healthcare providers and physicians, EHRs can act as centralised repositories for patient information and data across all the touchpoints a patient visits, creating a cohesive source of truth and reducing the scope for human error from eliciting data manually. The use of EHRs also shifts the burden of gathering and supplying certified health records from consumers to healthcare organisations. This creates a more streamlined and less bureaucratic patient experience. 

Encouragingly, adoption of EHR systems is on the rise at healthcare organisations globally and throughout the APAC region. In the US, for example, EHRs have become near-ubiquitous² since the implementation of the Health Information Technology for Economic and Clinical Health (HITECH) Act in 2009. Nearly all (96%) non-federal acute care hospitals and 78% of office-based physicians had adopted certified electronic records as of 2021.

In APAC, by some estimates the EHRs market is expected to grow from under USD 6 billion in 2022 to nearly USD 9 billion by the end of the decade.³ Governments are in many cases leading the charge. Launched in 2012, Australia’s EHR system – My Health Record⁴ – has seen growing usage by both consumers and healthcare professionals.⁵ In Singapore, the launch of a national EHR system across 280 institutions and some 14,000 clinicians is frequently held up as a model of EHR adoption for other markets.⁶ Japan’s Mynaportal,⁷ meanwhile, has emerged as an important repository for access to health information and services for citizens. 

However, for insurers to unleash EHRs' full underwriting potential, several conditions need to be met. The first is the access to comprehensive and authoritative health record databases. 

For privacy and other understandable reasons, access to EHR systems is still largely off limits to insurers in many markets. Enacting the right safeguards, such as mandating patient authorisation and consent before a direct information exchange with insurers can be established, will be key to enabling the use of EHRs to accelerate the L&H insurance onboarding process. 

Another issue is that health information often remains fragmented, given the sheer number of jurisdictions, institutions and technologies involved. One study in the US found most physicians find it difficult to integrate information into EHRs, due mainly to challenges around the interoperability of EHR systems.⁸  Here in APAC, one poll found three-quarters of healthcare professionals struggle to use health data effectively due to the prevalence of data silos. ⁹

Clinical standardisation is another prerequisite for the wider adoption of EHRs in underwriting. Given the volume of digital health information available, and often duplicated, in various formats, we must be able to aggregate and normalise data so it can be easily integrated, analysed, and used at scale. 

Until some of these barriers are brought down and patient information assembled and updated more holistically, our industry's ability to leverage EHR data for informed risk assessment and decision-making will remain limited. 

Yet while we may not be able to predict when market conditions will be ripe for the mainstream adoption of EHR data for underwriting, we can’t let that halt progress completely. We need to take the steps that are possible today to advance L&H underwriting processes. For example,  Swiss Re's Underwriting Ease collects all medical requirements including EHRs and displays actionable information in easy-to-understand visuals with flags for items needing attention. It alleviates underwriters' administrative burden of searching and sifting through siloed documents and pages of PDFs. 

More broadly, we have designed our Digital Health Underwriting (DHU) solution to automate the collection of medical data, also known as second-level medical evidence, and easily integrate this with underwriting platforms. This will give insurers the tools to make timely and precise underwriting decisions, provide a more responsive customer experience and reduce operational inefficiencies, boosting business performance over the long term. 

Above all, ensuring the sustainable growth of EHR-based underwriting will require establishing and maintaining trust between insurers and consumers. Health information is understandably sensitive, and many end-consumers will have concerns about whether their personal information is being used in a responsible manner. They may also want to understand how their health information affects underwriting decisions. 

As research from organisations like The Geneva Association has shown,¹⁰ we can address these concerns by building on the essentials of data governance. This includes embedding robust data security and transparent communication in the models we develop and ensuring fairness in risk assessment. 

We already have the technology to automate the processing of medical data. Ensuring these capabilities are applied, as data from EHRs becomes more ubiquitous and accessible, can lift automated underwriting to new heights of speed and sophistication. This will pay immediate dividends in terms of customer experience, and ultimately extend our capacity to provide coverage. A better window on the region’s health trends is a benefit to us all, and can contribute to the resilience of the industry and society as a whole.