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Is Anyone Up For ‘Continuous’ Underwriting?

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Here’s something you don’t hear about every day. It has to do with post-issue underwriting, and technology.

Post-issue? That’s right. Celent surveyed insurers on whether they are interested in the concept of doing “continuous underwriting.” That would be underwriting after policy issue, in response to changes in a person’s condition or health or other underwriting factor that can be monitored.

This underwriting would be based on new sources of consumer information. These sources would include wearables and implantable sensors, Celent said.

At first blush, the notion of that sounds rather fantastic or maybe something for the realm of science fiction.

After all, would people allow some service or nurse to insert a sensor in, say, their necks, shoulders or other body parts? Would they consent to wearing some device daily or frequently? To get some sort of underwriting advantage offered by a life or health carrier? Really?

Come to think of it, maybe it’s not so fantastic. After all, veterinarians already insert microchip implants in the scruff of the necks of family pets. If the pet runs away or is stolen, this increases the chance that the family will locate the animal. (This assumes the chip works and the locator service responds.)

In addition, auto insurers have begun offering customers the option of having a GPS tracking device inserted in their cars. The insurers use the data generated by the device to reward discounts to those who demonstrate good driving habits. (Not incidentally, trackers can also help locate teen drivers who may be lost, don’t return home on time or decide to take the family auto for a spin into the next county.)

Ah, but those devices are for pets and cars, not for a person’s body. There is the rub. Are life insurance carriers into this idea?

“Our research shows that insurers are interested, but perhaps not ready for the concept,” said Tom Scales, research director in Celent’s life, annuity and health insurance practice. He authored a report on the topic.

However, he said, “as wearables and sensors become more common, as Internet users age, it will be interesting to see if this changes.”
This is just a hunch, but my guess is that some carriers will eventually offer something like this as an option, in the same way that auto insurers are offering tracking devices as an option. That would allow underwriters to “read” how an insured is doing on, say, activity levels, blood glucose levels or other specified markers. (This assumes the wearables or implants work and that the reading technology is free of bugs, glitches and related problems.)

First, of course, the devices need to be perfected, and privacy and various personal issues need to be addressed, to say nothing of creation of an appropriate discount or incentive system. Getting from here to there would seem to require several years of research.

However, some carriers are already testing — and using — underwriting data gleaned from other untraditional sources such as social media. So this wearable/implant approach might be the natural next step. Well, maybe not “natural.” Maybe it will be the technological next step. But it wouldn’t surprise me to see it happen some day. What about you?

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Linda Koco, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Connect with Linda →

  • John Olsen

    Interesting idea, Linda. But it seems to me that continuous underwriting mitigates — if not reverses — the RISK TRANSFER essence of insurance. Moreover, it destroys the “I’ve acquired protection at a KNOWN cost” benefit.

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