Have you ever shopped online and been presented with: “Customers who bought this product also bought these”? That’s Big Data at work.
You use your FitBit to track your physical activity, but add in a comparison to how others are achieving their fitness goals; again Big Data is at work.
Big Data is now a part of our everyday lives. You cannot read a news magazine or paper and not read about how Big Data is transforming our world, including purchasing life insurance. Wall Street Journal published an article earlier this year – Life Insurers Draw on Data, Not Blood.
That’s right – Big Data is now used for underwriting life insurance.
National Life Group introduced EZ Underwriting earlier this year on FlexLife II. Guess what – you got it, we’re using Big Data.
Our Big Data is the Risk Classifier. The Risk Classifier helps underwriters assess mortality risk of an applicant .
The Risk Classifier is a predictive-modeling tool developed by LexisNexis. It gathers information from:
- Consumer Public Record Data
- Consumer Credit Data
- Driving Records
Lexis Nexis aggregates all the data and uses an algorithm to produce a mortality score. This score is one of many tools the underwriter uses to assess the overall mortality risk of applicants. Other data sources are the MIB and the prescription database check. Through the use of all these tools and evaluating medical history the underwriter makes a decision. Sometimes it’s necessary to get additional information, such as paramedical exams or blood or APS reports to make a full evaluation.
The Risk Classifier allows for a less invasive process while still making the right mortality decisions. If between the risk classifier score, and the other data sources, the insured looks like a healthy risk, the insured will be assigned a rate class without traditional medical testing being required. That’s it!
Things to keep in mind with Risk Classifier:
- Risk Classifier uses an advanced algorithm to determine a score
- Risk Classifier is a predictor of mortality risk, not of life expectancy
- The same number/percentages of preferred and elite risks will be issued using EZ Underwriting as with full underwriting
- Risk Classifier is only used to help accelerate cases that are Elite, Preferred, Select, and Standard risks
- Risk Classifier is not used for adverse or rated cases
The use of new underwriting tools like the Risk Classifier creates a new paradigm for risk assessment and selection. It enables National Life Group to identify good risks quickly and accelerate these cases through underwriting without having to obtain invasive and costly (in time and money) additional requirements.
Using tools like the Risk Classifier allows us to issue cases faster and easier – and that’s the real benefit of utilizing Big Data.
Watch our Video to learn more about EZ Underwriting.
More Underwriting Resources.