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Personalise your insurance journey: Unleash the potential of predictive underwriting

We've all either bought personal insurance or will have to in the future. Health, travel, personal accident, motor or perhaps, home. They are all forms of "personal" insurance…but it really isn't. The insurance journey is rarely personal. It is also rarely tailored for you or your household.

All that is changing.

Like shopping or web surfing, everything is becoming more personalised. Consumers recognise there is a value exchange in giving out their personal information. For example, I would be less hesitant to share my email if I knew that I stand a chance to win a pair of movie tickets or double my airline miles.

In the same manner, our research indicates they are also open to letting primary insurers know when they go to the doctor, or when they get their glucose or insulin levels checked for example…IF it helps lower their premiums or becomes a pro-active measure to indicate how well (or unwell) they are.

Swiss Re's recent Asia Health Protection Gap research shows that over 80 percent of customers are open to sharing their fitness data with insurers for a better insurance value propositions. Over 50 percent of respondents across all income groups expect to increase their health and wellness spending in the next 12 months. These respondents generally show a higher level of interest in buying insurance. All of this is very encouraging, as it reflects the opportunities for re/insurers to develop insurance solutions that is personalised to meet the evolving needs and aspirations of each individual customer.

From a product innovation perspective, the first wave of real personalisation in health protection solutions is already taking place.

Automatic Issue Offer

Swiss Re's Automatic Issue Offer combines unconventional and traditional data into predictive models using Artificial Intelligence and machine learning.

Here's how:

Let's take the example of a person who requires a regular dose of medication. If their intake, doctor or pharmacy visits are logged, we're better able to predict their quality of life going forward. This could also help reduce the amount they pay on their health premiums. The current old school "set and forget" style of insurance underwriting would then go out the window.

The benefits include a tailor-made insurance offering dictated by their health, not a pool of people or previous payouts or covers.

For instance, a pharmacist can offer cardiovascular health protection insurance to a regular buyer of hypertensive drugs based on outcomes of the predictive model which indicates the person or a family member may be suffering from a heart condition. In our recent implementation of Automatic Issue Offer, 36 percent of our existing customers were able to have either a guaranteed or simplified offer based on standard underwritten rates.

It is the first step to personalising the insurance customer journey while closing individual health protection gaps.

Impact of digital platforms on persistency and risk

Another tech-enabled product we've been working on is the predictive lapse model. The model helps anticipate and intervene before a customer ends a policy. In a recent case study, our predictive lapse model and a predictive underwriting model showed 90% and 95% accuracy in lapse and underwriting decision predictions respectively.

Data generated through wearable fitness and health trackers along with other traditional data helps insurers anticipate when a customer will end their health policies. This insight will enable insurers to take action before the insured terminates the insurance policy and reduce the lapse rate while improving customer retention.

The intervention can be a simple message reminding a healthy customer who is likely to lapse their insurance policy that their policy will expire soon, while offering them the options such as financial incentives and/or re-underwriting policies to influence their decision. There could also be a follow-up to understand the customers' current protection needs and how we can provide them with the solutions they need or may not be aware of.

Healthy now doesn't mean always healthy. As personal situations change and as you get older, this data is going to be very valuable to getting a better policy in your hands at the right time in your life stage. Going forward, we expect to see more personalised touch points throughout the insurance customer journey.

Next, I'll share how new underwriting approaches will enable insurers to personalise pricing for individuals when purchasing health protection solutions.