Making it easy: rapid innovation in insurance underwriting

By Adele Mossman, Vice President, Individual Operations, and Norm Leblond, Vice President, Chief Underwriter and Claims Risk Officer, Sun Life

Digital innovation continues to shape our lives – and it continues to shape the insurance application and underwriting process.

Specifically, it’s making the process simpler, easier and faster. By having technology handle more of the administrative burden, we can free up your time for sales and Client service. Clients can benefit too, with a less invasive, less time-consuming and less complicated experience.

Innovation at every stage

The key to a seamless experience for you and Clients is simple. We need to ensure that improvements happen at every stage of the insurance application process. From data intake to payment processing to the delivery of policy documents, every stage counts. We want to make the end-to-end process as simple as possible.

The launch of Sun Life’s electronic application and e-signature features has helped bring ease to the front end. In fact, our first electronic application – launched about 20 years ago – was the first of its kind in Canada. But there’s even more innovation happening during the underwriting process and policy delivery. It’s based on the evolving use of technology, artificial intelligence and data analytics.

More than ever, we’re moving to accelerate the underwriting process and use artificial intelligence and predictive modelling. The key is doing so with our existing product and pricing structures without asking for additional medical tests from Clients. In certain circumstances, our new methods involve replacing the actual and known protective value of evidence that we’ve obtained for decades. We’ve been moving through this digital transformation for quite some time. But the pandemic has accelerated the pace of change. And you and Clients will benefit.

The (not so good) old days

Even 20 years ago, as the digital age was emerging, the insurance application process was invasive and time-consuming. All forms were paper based. And we needed a wealth of personal health information. This typically included blood and urine samples. It may have also involved height, weight and blood pressure measurements (vitals), ECG tests and, in some cases, chest x-rays.

Turnaround times were long because the manual processing of information was time-consuming. As an advisor, much of the administration burden fell on your shoulders. This was valuable time you could have used to engage with Clients and prospects and grow your business. As for Clients, none of them enjoyed the process of a health professional collecting additional health information.

Times have changed for the better, and the process will continue to improve.

We know that you and Clients want quick, real-time decisions as much as possible. We’ve been ahead of the industry with innovations to our underwriting technology, with the highest rate of fully automated processing. And that rate continues to increase.

Just five years ago, 45% of Sun Life insurance applicants required no health exams. Today, that number has increased to 60%, and it may be over 80% in the near future. And we’re not done yet, as we expect the experience to continue to improve. 

Underwriting innovations are pushing us beyond our current risk management boundaries. We are, in a sense, using technology to redefine our future risk comfort zone.

Risk management is still a critical part of the underwriting process. But we now have new technology and data science capabilities to unlock further potential, using predictive models to identify risks that previously required health exams.

We’re able to stratify various risks differently. And a greater number of insurance applicants are falling into these stratified risk categories. That lets us automate the underwriting process. For Clients, it can mean fewer tests for fewer numbers of people. Combine that with electronic meetings, online data intake and e-signatures, and it can be a better experience for all.

The future – to boldly go

The insurance application and underwriting process has changed significantly in the past 10 years. And there will likely be more change and innovation in the years ahead.

Here are some of the innovations we hope to see in the future.

  • The move to paperless. In the near future, we expect close to 100% of the insurance application, approval and policy delivery processes to be paper-free.
  • Dynamic underwriting – for mutual wellness. Many car insurers are now using in-car technology to monitor vehicle use and reward safe driving with lower premiums. Dynamic underwriting might do the same for life and health insurance. We already support Client wellness through some of our health products. For example, we offer Teladoc Medical Experts through our critical illness policies and LifestageCare™ for long-term care.

    Dynamic underwriting could be a natural extension of this, and Sun Life and Clients could both benefit. A dynamic model could incent good health, and improved health could bring lower premiums. That – along with our Lumino Health platform – might be ideal ways to deliver this.

We expect that many enhancements will automate existing administrative functions. For all automated functions, we’ll inform you of every Client action. The key benefit for you? Freeing up more time to devote to other business-generating activities.

Working together – to improve the Client and advisor experience

As technology advances, the expectations of you and Clients continue to rise. To help meet these higher expectations, the service side and the underwriting/risk management side of our business must work together. And for Sun Life, this is one of our highest business priorities. We’ve aligned teams that touch the Client/advisor experience. Our goal is to help improve the sales and application process and enable the solutions that Clients are seeking.

The traditional “slow to make changes” insurance model is forever changed. Our digital world is allowing for faster advances – and enabling the quicker introduction and testing of new methods.

So, stay tuned. The COVID-19 pandemic has accelerated many recent innovations. We expect these faster innovation timelines to continue for some time to come.