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The need for speed: A “Maverick” approach to underwriting

Maverick approach to underwriting

 The multiple award nominations for “Top Gun: Maverick” at this year’s Oscars got us thinking. What do Tom Cruise and life insurance underwriting have in common?

Answer: The need for speed.

Similar to Pete “Maverick” Mitchell’s need for speed in the Top Gun movies, in the life insurance industry, speed is critically important in the underwriting process. Companies are striving to keep up with the fast-paced demands of the modern world, and underwriting is no exception. Today’s carriers absolutely want their underwriting process to be accurate. But from a competitive standpoint, if that offer can’t be delivered quickly, you may be forfeiting your business to a faster competitor.

Balancing risk and speed 

Balancing the speed of underwriting with accurate risk assessment is what keeps us up at night. The solutions we provide are a portfolio of sophisticated predictive analytics built with machine learning and artificial intelligence (AI). And while these solutions don’t fight the enemy, take out global risks, strengthen the bonds between fighter pilots or enable you to drive off into the sunset with Tom Cruise, they have proven vastly valuable to companies in the business of assessing mortality risk.

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Locking in on the target

We used well-established AI methods and tools to apply our machine learning-based algorithm to years’ worth of historical policies of one client, we outperformed traditional underwriting by 6% on the basis of claims. That’s the kind of performance that raises the eyebrows of even the most jaded underwriting, actuarial and finance executives. (See the proof.)

But is it fast?

All well and good. But in underwriting, stellar performance must be accompanied by speed. So when our AI and machine learning experts created a predictive life insurance risk model that beats traditional approaches by 6%, we still had some burning questions: Is it fast? How much time from inquiry to sale? How much time from when a consumer asks about life insurance to when they purchase a policy? So we tested our solution with a cohort of applications from our client. We applied LifeScore Med360, and in the first two years of operation, approval time was slashed by 25% and acceptance rates jumped by 30%. And that, of course, leads to quicker sales. Boom.

In the first two years of operation, the algorithm reduced approval time by 25%, leading to a 30% improvement in acceptance rates.

Another way of putting this: With the LifeScore Labs algorithm, this carrier experienced a 30% increase in policy acceptance by consumers in ultra-preferred policies because the algorithm accelerated approval time by a full week.

Get your acceptance speech ready

Without getting specific, this carrier improved its operational efficiency by decreasing approval time and increasing acceptance rates (this is the standard insurance problems we like to geek out on and about as "un-Maverick" as you can get).

Of course, these results will vary from company to company, but think about your book of business and increase your acceptance rates for ultra-preferred by 30%. Then multiply that by the lifetime value of each customer.

With these results, you may not be nominated for an Oscar, but you might make some heads turn in your organization. Maverick would be proud.

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