RGA Underwriting Initiatives
Jaime Correa CLU, FLMI
September 14, 2017
SVP, U.S. Mortality Markets Underwriting
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What We’ll Be Covering Today
RGA’s Focus on Initiatives
U.S. Underwriting’s Role with Initiatives
Key Initiatives
• DriverRiskSM
• TrueRisk®
Life
• ASAP
• Rx Scoring Model
• Digital Health Records
The Future of Underwriting
Q&A
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RGA’s Focus on Initiatives
Sharing risk with our clients through traditional reinsurance business
Leveraging our talents and spirit of innovation to develop new solutions that help our clients today
Analyzing trends and applying our expertise to stay ahead of tomorrow’s needs to support the growth of our clients and the insurance industry as a whole
Help our clients assess new risk management tools and take risks alongside clients
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U.S. Underwriting’s Role with Initiatives
U.S. Underwriting is comprised of …
• Facultative Underwriting
• Fac. Exclusives
• Underwriting Services
• Medical
These teams support RGA’s leadership position in a number of ways, including …
• Facultative underwriting support
• Development and active management of innovative underwriting services that benefit our clients
Initiative: DriverRiskSM
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Drivers with an MVR infraction experience higher all-cause mortality than those with a clean driving record1
The study noted that because the focus was on all-cause mortality, the additional mortality did not necessarily come from automobile accidents:
“It is possible that those who use cell phones while driving engage in other risky activities, thereby
increasing their overall mortality risk.” 1
1 RGA Global Research & Development Research Bulletin, May 2014
RELATIVE MORTALITY
Those with MVR infractions
compared to those with a clean record
Distraction-affected MVR infraction 137%
MVR infraction – other than distraction-affected 117%
Clean driving record 100%
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Even though the MVR is the traditional tool for validating driving records, there are limitations
They are expensive
Mismatches and bad driver license numbers
They don’t cross state lines
Includes pre-adjudicated violations (e.g., open tickets)
They omit violation dismissals and downgrades
They can even omit violation convictions (depending on the state)
They are subject to a data latency issue as violations progress through
the adjudication process
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DriverRiskSM has shown to be an effective indicator of MVR violation activity for the auto insurance industry
Proven to save auto insurance carriers on MVR expenses when used as an alert in front of the MVR order
Alerts to the presence of violation activity so a carrier knows when to pull an MVR or when to avoid an MVR
TransUnion’s court record-based traffic violation product is now available for the life insurance industry
$$
$$ $ $
$
$$ $
70-80% of drivers will have
a clean driving record
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They are less expensive
Crosses state lines for states in production
Includes pre-adjudicated violations (e.g., open tickets)
Includes violation dismissals and downgrades
Includes violations for non-licensed or foreign drivers
Court record data is less costly than a state MVR and contains unique insights into driver risk
Finds violations for drivers regardless of changes in name, address, and driver’s license
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Court records are the precursor to violations that ultimately populate the MVR
State MVR
updated
Driver fights ticket in
court
Driver pays
fine (pleads guilty)
Case management
system updated
Up to 1
month
1 day
5-18+
months
State MVR
updated
2 months
6-19+
months
~4 weeks
~4 weeks
Day 1
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Identify when applicants or policyholders have
ratable violations that meet your criteria
Customize alert criteria by: state, violation type, and
violation disposition
Avoid MVR orders for “clean” drivers without
violation activity
Receive an at-a-glance snapshot of all activity for
each driver: number of violations, number of ratable
violations, out-of-state violation indicator, and recent
conviction indicator
The DriverRiskSM Alert provides at-a-glance method for determining next action An enhanced court record violation data solution
AlertHit: At least one violation conviction was
found for the subject within the license key
search parameters
Not Found: No violations were found for
the subject within the license key search
parameters, AND the PII provided on input
was not verified
Clear Hit: At least one violation was found
for the subject within the license key search
parameters, but no convicted violations
were found, OR no violations were found
but the PII provided on input was verified
Alert Output
Initiative: TrueRisk® Life
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What is TrueRisk® Life?
A credit-based behavioral index highly predictive of mortality and lapse for use across the life insurance policy life cycle
A new piece of evidence that will transform the life insurance industry through unique insights into mortality and lapse
With the growing underinsured middle market, aging distribution group, and increasing consumer demand for instant transactions, insurance carriers need to quickly assess risk with a high level of confidence in a way that does not inconvenience the customer
A new source for improved risk selection, segmentation and efficient underwriting
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Filtering Down The Big Data UniverseFiltered to Get the Most Important Attributes
800 credit attributes that quantify risk
associated with access to credit.
Marketing
• Shopper (credit card transactions)
• Social media
• Household information
• Checking/savings
• IRS data
• Income, race, ethnicity
Public Records
• Criminal
• Derogatory records
• Court filings
Titles and Licenses
• Property ownership
• Professional licenses
Data not used in the model
25 credit attributes that quantify
behavioral risk associated with credit,
foreclosure, bankruptcy and eviction.
Credit data
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How the TrueRisk® Life Model Was Created
Built the model on 44 million lives and more than 3 million deaths
Started with more than 800 variables offering features of individual’s credit history
Selected variables that were:
• Most predictive of the outcome
• Stable over time
• Non-gameable
• Not too correlated with the other variables
Binary logistic regression
Model validated internally using an additional 30 million lives and 2 million deaths
Tested model using traditional mortality and lapse studies
Used a random holdout dataset of another 18 million lives and 1 million deaths
StartingData
Variable Selection
ModelProcess
External Validation of
Model
• Data comes from de-personalized 1998 credit archive (90% of the U.S. population)
• Model calibrated to actual deaths occurring over a 12-year period
TransUnion and RGA built and tested TrueRisk® Life on 92 million individuals
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TrueRisk® Life Presented as a Score from 1-100
Higher
Numbers
Higher
Risk
Lower
Numbers
Lower
Risk
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TrueRisk® Life DeliverablesProvides the transparent drivers behind the model
TrueRisk® Life Score1
Reason Codes2
Credit Report3
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Applications Within Life Insurance
Improved Risk Segmentation
• Fully or Simplified Issue Underwritten Environments
Accelerated Underwriting
Targeted Marketing
In force Policy Management
• Lapse and Mortality Insight
• Cross-sell or Upsell Existing Customers
• Engage Orphaned Policyholders
Initiative: ASAP
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What is ASAP?
Introduced in 2006, ASAP streamlines process for electronic submissions of facultative cases for immediate decision
ASAP currently offers 33 individual and 14 dual impairment options
Support and direct access to our underwriters available through the Facultative Call Desk
Winner of 2012 Best Innovators Showcase award for web-based underwriting process
On January 2016, the 100,000th case was submitted to ASAP
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ASAP Benefits
ASAP can improve placement rates and …
• Help recover underwriting costs
• Improve agent satisfaction
• Leverage RGA’s underwriting expertise and reinsurance capabilities in ways that benefit all parties involved
ASAP’s greatest benefits are higher placement rates as a result of …
• More competitive offers
• Fast, easy and secure case submissions
• Direct support from RGA underwriters via the facultative call desk
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Preferred Offers Now Available for Some Impairments
Preferred offers available on six (6) key impairments as of 6/12/17
• Abnormal A1C/blood sugar – no diabetes history
• Elevated triglycerides
• Foreign travel/foreign nationals
• EKGs
• Occupations
• SCUBA diving
Preferred offers will be available for up to 15 additional impairments by the end of 2017
Targeted impairments for preferred will not conflict with carrier’s current preferred guidelines for build, blood pressure and cholesterol
Initiative: Digital Health Records
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The Goal for Digital Health Records in Life Insurance
Better health data and better availability of health data
More efficient and effective model for delivering insurance, especially in the middle market
Enhance our capabilities using physician statements/reports
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Digital Health Records: Good News, Bad News
Good News: More Data
• Lifetime medical history
• Multiple sources
• Discrete data
• Records on demand
Bad News: More Data
• Volume of data (thousands of pages in some cases)
• Disparate formats, hybrid records
• New standards, vocabularies, etc.
• Access, sharing, matching
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Long-Term Strategy
Holistically assess the structured and unstructured data elements in DHRs
• Structured data (SNOMED CT, RxNORM, LOINC, CPT, vitals, age, and gender)
• Unstructured data (free-form text from the doctor’s notes, consults, encounters, etc.)
• Images (EKGs, x-rays, etc.)
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Our Phased Approach
Phase One - Score structured data
Phase Two - Mine free-form text with natural language processing (NLP) tools
Phase Three - Develop predictive models to holistically assess
Initiative: Rx Scoring Model
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RGA Pioneered the Rx Rules Concept
2009 mortality study goals
• Determine whether Rx histories are predictive of mortality
• Analyze effectiveness of drug risk hierarchies at segregating mortality
Largest Rx mortality study performed at the time
• 1.1 million insurance applicants
• More than 21 million distinct prescription fills
• Over 2,500 deaths between 2005-2007
Published in March 2009 issue of On The Risk
Proving the Protective Value of Rx Histories for Life Insurance
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Developed the RGA Rx Scoring Model
Severity-based scoring system (1-100) for all drugs on RGA-hosted system
• More than 65,000 combinations scored using multiple variables, including age, gender, route of delivery, time since last fill, number of fills, and physician specialty
Provides up-to-date listing of Rx information via leading third-party provider
System and rules updated on an ongoing basis
Team of Rx experts, including underwriters, medical directors, actuaries, technologists
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Next Generation of the RGA Rx Scoring Model
Applies a predictive model to generate a holistic view of the Rx report
Factors in drug-drug combinations and alternative indications
Can be customized by client and product
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Benefits for Client Companies Using RGA’s Rx Scoring
Minimizes costs by saving underwriters’ time
Enables faster decisions
Increases protective value by uncovering non-disclosed medical conditions
Flags concerning medications
Eliminates costly human mistakes
Translates large volume of data into actionable information for an underwriter
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The Security of Experience. The Power of Innovation.
2009 2012 2013 2014 2015 2016 2017
RGA proves correlation between
prescription history and
mortality
RGA proves correlation between
motor vehicle records and
mortality
RGA publishes distracted
driving study results
RGA proves correlation between credit
behavior and mortality
RGA conducts experience studies on
$1.3 trillion of inforce life business in
the U.S.
RGA develops acceleration
program
RGA underwrites
its 3 millionth facultative case in the
U.S.
Rx Scoring Toollaunched
TrueRisk® Lifelaunched
Dynamic Risk SelectorSM
launched
DriverRiskSM
launched
The Future of Underwriting
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An Ecosystem of Opportunity
Future Advancements• Smoker detection
• EHR data
AURA• Automated underwriting engine
• Comprehensive evaluation
of TrueRisk® Life, Rx scoring,
MIB, MVR, labs, reflexive questions
Dynamic Risk Selector• Predictive model, TrueRisk® Life
and underwriting rules
• Accelerated underwriting
TrueRisk® Life• Behavioral index score
• Predictive of mortality
and lapses
Rx Scoring• Prescription history scoring
• Predictive of mortality
Proprietary and confidential. For internal client use only.
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What’s Next? Stay Tuned.
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