In this Q&A series, Tim Morant, Chief Risk Assessment Officer at Munich Re Life US, explores the rapidly evolving risk assessment landscape with industry experts.
As the head of our Underwriting Risk Assessment and Research team, Lisa Seeman (LS) is at the forefront of the latest trends and innovations. With broad actuarial experience, she evaluates underwriting risk, including researching new data sources and their mortality impacts. She also leads our industry surveys, including the biennial accelerated underwriting survey, and is an avid presenter at industry conferences.
Tell me about a time or opportunity that had a major impact on the trajectory of your career.
LS: Being approached with the opportunity to join the “Innovative Underwriting Solutions” team at Munich Re! I was originally applying for a role on the pricing team, which is where I had spent the better part of my actuarial career until that point. However, the recruiter suggested I might be a better fit for the IUS team, which focused on supporting carriers with their up-and-coming accelerated underwriting programs (AUW). My initial thought was, “What is accelerated underwriting?!” Fast forward seven years, and there’s not a day that goes by that I don’t think about AUW in some capacity. I feel fortunate to have a bird’s-eye view of this ever-evolving underwriting paradigm within the life insurance industry.
What are some of the key market trends that excite you about where things might be headed?
LS: The growing adoption of digital health data sources in underwriting and the potential these tools have for eliminating mortality slippage in AUW programs.1
What can we do as an industry to react to or stay ahead of these trends?
LS: Continue to closely monitor new and evolving underwriting programs, especially as new tools are being implemented and underwriting processes are being tweaked. It is far easier to address high mortality slippage caused by risk misclassification upfront rather than facing high mortality experience years after policies have been issued and claims have emerged.2
What are some of the major challenges you see that the industry is facing or will face in the near term?
LS: Data overload! With so much digital data now available at our fingertips, it’s a challenge to ensure that it all is considered for optimal risk assessment and that nothing material is overlooked in the underwriting process.
It is far easier to address high mortality slippage caused by risk misclassification upfront rather than facing high mortality experience years after policies have been issued and claims have emerged.
Lisa Seeman
Munich Re Life US
Are there any blind spots that worry you in underwriting today or in the life insurance market in general?
LS: As the industry continues to move away from traditional life insurance labs and exams towards clinical labs and medical records, how do we continue to progress toward closing the insurance coverage gap, specifically with regard to younger applicants who lack a digital health data footprint and may be more difficult to underwrite in this new paradigm?
If so, what can we do to fix those blind spots?
LS: We need to continue to seek out new and innovative ways to collect the medical information we need on new applicants to feel more confident in our risk assessment while providing them with a customer-friendly application process. This includes reconsidering potential underwriting data sources, such as wearables, which contain rich health information on an individual but have been written off in the past because of implementation challenges.3
What does it mean to you to “get the basics right,” and why would that be important in underwriting and risk assessment?
LS: As an actuary, when I think of “the basics”, I’m immediately transported back to my days as an actuarial student and studying for the Life Contingencies exam. “Getting the basics right” for an insurance carrier means that you’re collecting enough in premiums to cover future death benefits and expenses. This starts with developing reasonable best-estimate assumptions based on the data and information we have available at the time of assessment. However, for this to work, there must be a good understanding of each risk to ensure policyholders are being placed in the correct risk class and paying the appropriate level of premiums —this all ties back to the importance of underwriting and risk assessment!
