In the last issue of 2023, we take a look at the surprising number of carriers leveraging AI, Fitch Rating's revised sector outlook for life insurers, and the results of Sikka's end-of-year life underwriting survey.
58% of Life Insurers Use Artificial Intelligence or Are Interested: NAIC survey – Fifty-eight percent of life insurers are either using or have an interest in using artificial intelligence in their businesses, an NAIC working group found. That data was part of the third in a series of surveys state insurance regulators are conducting across the insurance world. The Big Data and Artificial Intelligence Working Group discussed the findings Friday during the National Association of Insurance Commissioners' fall meeting in Orlando.
Higher interest rates drive ‘improving’ 2024 outlook for life insurers, Fitch reports – Fitch Ratings has revised its sector outlook for North American life insurers to "improving" from "neutral" for 2024, according to its outlook report for the sector. Fitch expects the Fed’s monetary tightening to cease and potentially pivot towards monetary easing. “North American life insurers will still benefit from the higher interest rate environment in 2024, which will facilitate top-line growth and enhance margins,” said Senior Director Jamie Tucker. “Their strong balance sheets should partially mitigate potential slowdowns in economic growth or macroeconomic volatility.”
2023 was the latest in a series of difficult years for the life insurance industry, with rising interest rates, increased mortality slippage, and a continuation of the downward trend of life insurance sales. In this period of rapidly changing markets, the industry has realized the importance of AI integration and automated/accelerated underwriting workflows to revitalize life insurance underwriting. From automating insurance quotes, chatbots to expound on policy particulars, and new underwriting rules engines to rapidly bring policies to issue, AI stands to expedite every stage of the life insurance business cycle. Furthermore, as electronic data sources become more comprehensive and natural language processors become more competitive, underwriters will be able to benefit from the complete automation of simpler term policies and instantaneous summarizations of the vast repertoire of EHR data sources. This is the power that AI brings to carriers; not in replacing underwriting talent, but in enabling that talent to bring as much value to their organization as possible.
Here are the results from the end-of-year survey that we conducted:
Which do you think is the most important factor in reversing the decades-long decline in life insurance sales?
Since incorporating risk scores, our mortality slippage has:
In your opinion, what are some significant untapped data sources?
Is automated/accelerated underwriting something you’re looking to adopt in the future?
Yes, our processes are archaic and manual. We are looking to improve the experience of the field, clients, and our underwriters.
Yes, it's becoming market table stakes.
Already adopted. Looking to optimize.
Yes, it improves the customer/agent experience, decreases operational costs and improves efficiency.
We already support over 25 clients for automated underwriting.
What type of data that currently isn’t available for the life insurance industry would you like to leverage?
Military and RX data
Rx in Canada
Cash pay, gaps in existing med claims/rx data available, better activity longevity indicators
Medical data is the key - any resource that provides medical history detail will be valuable
Learn more about Sikka and how our Oral Healthcare data can help with mortality risk – email firstname.lastname@example.org.