Stéphane Rochon, Humania Assurance President and Chief Executive Officer, says that fully underwritten simplified products reflect a shift in the industry toward a client-centred approach.
Under the client-centred approach, insurers should limit the questions to those related to the client’s condition. The automated product HuGO can do this, Rochon says. “Artificial intelligence and our real-time access to the MIB Group database allow advisors to ask the client pertinent questions only, as opposed to automatically asking every single question in the application one after another.”
This medical database is a clearinghouse of data on insured gathered by North American insurers. It lets insurers’ online questionnaires eliminate irrelevant questions as advisors enter their clients’ answers onscreen.
Rochon expects this approach to evolve and advance the industry. Soon insurers will be able to connect to other databases, he predicts. The resulting cross searches will allow for simplifying the process even more.
“For automated products to succeed and remain competitive, we have to find ways to measure risk unintrusively. We will have to access external databases and interpret their data in real time. Although currently rare in Canada, access to new external databases in real time will completely transform risk selection. It will simplify it considerably along with the information obtained directly from the client,” Rochon says.
Today, insurers can connect to databases of credit firm ratings or of shopping behaviours kept by sites like Amazon, Rochon adds. He also mentioned a prescription drug data aggregator in the United States offered by big data supplier LexisNexis Risk Solutions.
“If we cross the data from three external databases we may be able to give the consumer an insurance price on the spot. Even at a lower price,” Rochon says. “This would simplify the product considerably while keeping our prices competitive.”
An automated product like HuGO already lets the insurer process about eight out of ten files without human intervention, Rochon says. “I save $100 on each of these eight files. It’s one of the differences between simplified products for people who are hard to insure and automated underwriting products. In a basic simplified product, the fewer questions I ask, the higher the price because I’m taking a greater risk,” he points out.