Some companies have mitigated the effect of random holdouts by the way they market the accelerated underwriting program to their distribution and customers (e.g., indicating the applicant may be eligible for AUW as opposed to guaranteeing a fluid-less process). This could be because they view the additional underwriting request as “bait and switch,” or it may be because these applicants are under-reporting the degree of severity, or not disclosing health conditions, and therefore it is in their best interest to try applying elsewhere. One problem companies face with random holdouts is that applicants withdraw their applications at high rates when invasive underwriting requirements are requested. The carriers that choose not to perform random holdouts usually do so in an effort to ensure a positive applicant experience. Both random and targeted holdouts provide insight and value. Targeted holdouts can be for specific underwriting criteria, such as diseases, occupations, etc., or used for selected distribution. They also serve to provide a sentinel effect for applicants and distribution. Random holdouts provide information on the underwriting process, requirements, rules, and the overall quality of the business. ![]() One-quarter of carriers report offering a substandard class to applicants through their current accelerated programs, but some indicated that this was limited only to a small number of cases with low to moderate table ratings and flat extras.ĭespite the expectation (by over 70% of carriers) that accelerated underwriting mortality will be higher than pre-AUW mortality, the vast majority indicated that they kept AUW premium rates the Although only two-thirds of companies allow tobacco users to go through their AUW program, almost all the programs that do are offering an equivalent number of AUW and FUW tobacco classes, with two being the norm. When asked about the number of risk classes offered, over 60% of carriers reported offering the same number of non-tobacco AUW classes as FUW, while the remainder offered one to two fewer AUW classes. While the number of available risk classes offered through an accelerated program does not always mimic that of the company’s fully underwritten (FUW) program, the gap is quickly narrowing. This article highlights emerging accelerated underwriting trends and shares some key survey findings. ![]() Each company’s AUW program is unique in that it reflects their current stage of adoption and the maturity of their individual program. While the term “accelerated underwriting” may have once resembled a simplified issue program, today’s AUW programs are looking more and more like fully underwritten programs without the medical exam and fluid collection process. Responses were received from 28 participating companies. individual life accelerated underwriting market. Munich Re Life US conducted an accelerated underwriting (AUW) survey at the end of 2018 with the goal of capturing new and emerging trends in the U.S. The traditional method of applying for life insurance is quickly becoming the exception rather than the rule, as more and more companies strive to improve the customer experience and expand their applicant pool by offering a faster and less invasive approach to buying life insurance. The growing Millennial target market is challenging carriers to explore new ways of selling and underwriting life insurance. The wave of the Baby Boomers at or nearing retirement has created a market shift toward a new generation of prospective life insurance buyers. The individual life underwriting landscape is rapidly evolving.
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