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Accelerated underwriting:

Mortality slippage study and monitoring best practices

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    March 2024

    Accelerated underwriting (AUW) programs in the U.S., despite being in existence for a full decade, continue to lack the credible mortality data needed to effectively measure experience. Carriers rely on AUW monitoring techniques, most commonly random holdouts and post-issue audits, as leading indicators of future mortality experience. 

    Munich Re Life US conducted a study of mortality slippage in U.S. accelerated underwriting (AUW) programs using random audit data provided by life insurance carriers. The data allowed Munich Re to estimate future mortality experience based on underwriting misclassification within the AUW decisioning process and identify best practices for AUW program monitoring. 

    Key findings: 

    • Misclassification trends by policy level characteristics signaled that males, older issue ages, and lower face amounts have higher mortality slippage.  

    • Mortality slippage was evaluated by issue age, face amount, and policy-level characteristics and ranged from 10-15% on average. 

    • Tobacco misrepresentation is increasing and remains a particular are of concern for AUW programs. 

    • Best practices include starting with broad monitoring and scaling down as comfort grows, utilizing available tools, and developing agile procedures for quick reaction.

    For more details, read the full article on the Munich Re Life US website (in English only).

    Contact the authors
    Lisa Seeman
    2nd Vice President & Actuary
    Underwriting Risk Assessment & Research
    Katy Herzog
    Katy Herzog
    AVP Underwriting Pricing & Client Support