Life Insurers have been adviced to keep Insurance fundamentals and first principles in mind when designing and implementing technology – backed risk solutions.
These principles requires Insured events to be definable, reasonable, manageable and rate-able. This is imperative according to Munich Re because technology backed innovation has the potential to enhance outcomes of tried and tested Insurance Principles and practices.
The rise of automated underwriting Programmes (AUPs) in the United States for example which started slowly when it was introduced in 2007 has changed significantly since 2015 when advanced data analytics made it possible for US risk carriers to incorporate ‘big data’ in their AUPs including demographic data, drug prescription information and motor vehicle records. The result is that 15% to 20% of term life Policies in the US are currently written through AUPs.