If you’ve tried to purchase life insurance and been turned off by the lengthy analog process, I don’t blame you. Removing barriers to coverage is why we’ve worked so hard to bring this essential product into the 21st century with an all-digital platform.
One of the most exhilarating parts of that innovation journey has been underwriting. Underwriting depends on data, and data—how we source it, how we analyze it, and how we use it—is evolving at an exponential pace. With things moving so fast it’s important to pause to acknowledge how far the industry has come, and ponder where it might be going.
The initial phase
Underwriting—the concept of which goes back many centuries—began to slowly evolve in the 20th century, with additional health and risk classes added beyond the initial one of age. The smoker/non-smoker designation that appeared in the ’70s, along with advancements in blood drawing in the ’80s, provided a more accurate risk assessment. But the administration of underwriting still included in-person appointments and hand-written paperwork, with a hefty price tag for labor costs and lab testing.
In short, it was viewed by many as an unbeloved process and the act of applying was seen by these folks as a lengthy and laborious chore. Despite consumers’ perspective on the underwriting process, it stayed relatively unchanged during the 20th century, perhaps because there was no real incentive to change it.
A digital awakening
One of the hallmarks of the 21st century is getting anything you want instantly and online, whether that be banking or getting approved for a loan. Life insurance is now also available instantly and online.
But not all digital underwriting is equal. The launch of “simplified issue” products enabled a more desirable front-end experience, but those have come at a cost for the consumer—quite