By Leslie Scism
Americans who want to buy life-insurance policies but are turned
off by the often slow-moving application process increasingly have
an option for bypassing blood and urine samples.
There is a catch. These customers will have to give
life-insurance companies access to their private medical
Doctors, hospitals and other health providers have been putting
consumers' medical information into computers for more than a
decade, to try to lower costs and improve health care. Now, the
data is becoming more widely used by life insurers, especially as
the coronavirus pandemic keeps potential customers from visiting a
lab or welcoming a paramedic into their home.
Recently, at least two large insurers -- Manulife Financial
Corp.'s John Hancock unit and Massachusetts Mutual Life Insurance
Co.'s Haven Life -- have announced new or expanded life-insurance
sales platforms that incorporate this data. In addition, Verisk
Analytics Inc. this week is launching a tool that uses algorithms
to evaluate digitized records in real time to provide immediate
assessment of an applicant in the form of a health-risk score. This
means that human underwriters won't have to spend time themselves
assessing the summaries.
Under the initiatives, insurers can avoid ordering up fresh
tests and collecting reports from doctors. Historically, such
traditional underwriting could take a month or longer. Insurers use
medical data to identify diabetes and problems related to the
kidneys, heart and liver that can lead to early deaths, among other
conditions. The better the health, the less applicants typically
"What we put customers through to buy life insurance is nuts,"
Brooks Tingle, chief executive of John Hancock Insurance, said of
the traditional approach. Innovation is needed because "it's
probably the hardest product to buy in the modern economy."
In June, Hancock launched an electronic application system, JH
eAPP, that is aimed at reducing processing time from weeks to, in
some instances, just minutes.
Insurers aren't the only companies using this data. Over the
past year or so, Alphabet Inc.'s Google, Microsoft Corp. and other
big tech companies have reached deals with hospitals for access to
medical data, on the hunt for groundbreaking discoveries and
potentially lucrative products.
Life insurers are finding the data increasingly accessible
thanks to middlemen firms that sort out the technological hassles
of obtaining the records and making them usable in insurers'
Life insurers' adoption of the technology started out slowly
partly because health-care information technology "is very complex
and life insurers are notorious for their aging technology, so
bridging this gap has been hard," said Dave Dorans, chief executive
at Clareto, an aggregator of electronic records and one of
Hancock's data suppliers.
"The onset of Covid has caused a huge spike in clients signing
up," he said.
Insurers must obtain consumers' permission to obtain the
material, whether the old-fashioned way or using this new digital
approach, and it is protected by the federal Health Insurance
Portability and Accountability Act.
Hancock's Mr. Tingle said a company survey indicated about half
of consumers would give approval for the electronic version.
All of the firms involved in the initiatives say that they take
protection of data seriously and comply with HIPAA. Life insurers
also say they have experience storing the massive amount of medical
information obtained through traditional underwriting.
Laura Lawrence, a furniture restorer in Cumming, Ga., said she
was comfortable giving Hancock access to the electronic version of
her health history when she bought a policy about two months ago.
Its underwriters used results of a recent physical exam, sparing
her the need to schedule a new one.
"The information is already out there in cyberspace" stored by
medical providers, she says. Turning it over to insurers digitally
"is probably more safe than having hard copies float around."
Some consumers say insurers' new efforts are overdue.
Beth Schramka, a financial adviser in Milwaukee, said she would
have welcomed use of electronic records earlier this year, when
Covid-19 shutdowns stalled life-insurance applications for herself
and her fiancé at Prudential Financial Inc.
The couple started their purchase in February, but Prudential
took until May to issue the policies, because of delays with the
physical exam. "It was frustrating," Ms. Schramka said.
A Prudential spokeswoman said the insurer appreciates Ms.
Schramka's "patience in awaiting the issuance of her policy." As
the pandemic unfolded, Prudential ramped up use of electronic
health records and believes they are "a good alternative to
traditional exams, labs and medical records in many cases."
Verisk's "EHR Triage Engine" uses algorithms designed with input
from biostatisticians, data scientists, medical researchers and
others. The technology can evaluate the health records of an
individual in less than a minute, said Maroun Mourad, president of
Global Underwriting at Verisk. In only about 15% of cases will
human underwriters still need to review the data, Verisk said.
Verisk also has a "Tobacco Usage Propensity Model," which
employs audio analytics to try to identify smokers. Applicants
provide a short snippet of their voice.
At Haven Life, digital lab results and medical-claims data have
been added to a mostly online underwriting process that has been
using algorithms for the past five years based on data such as
answers on the application form, prescription-drug databases and
motor-vehicle records. It sometimes requires blood and urine
samples, as well.
Haven Life fast-tracked incorporation of the additional data in
May as medical exams became difficult to schedule, it said.
Write to Leslie Scism at email@example.com
(END) Dow Jones Newswires
August 09, 2020 05:44 ET (09:44 GMT)
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