Offer greater acce in an increasingly d
The Life Insurance Issue • Special Sponsored Section
How Data Was Life Insurance’s Quiet Hero A new frontier for life ins of the Pandemic, and What’s toinsurance Comerisk scores (“in Credit-based
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key make-or-break factor for any business or industry during the COVID-19 pandemic has been the ability to shift business online and provide “contactless” service. This holds particular pain for an industry built on home paramedical exams and handshakes across dining room tables, but the solution has actually been here the whole time, and it all comes down to some innovative and powerful uses of credit-based and non-credit-based data. This Q&A features TransUnion’s Jeff Reynolds, whose background and expertise center on insurance product development and strategy, and Mike Moran, a 45-year industry veteran — from life insurance to securities — who led their company’s shift into the life insurance space. They tell the story of how TransUnion and digital data solutions are vitalizing the life insurance industry, including a behind-the-scenes look at how they custom-fit their solutions to position carrier success and customer satisfaction throughout the product life cycle.
Q: What is the importance of credit-based risk scores to today’s life insurance industry? Reynolds: Credit-based insurance scores measure the behavioral responsibility of individuals. People who manage their finances well tend to also manage other important aspects of their lives responsibly, such as avoiding smoking or excessive Jeff Reynolds drinking, and instead maintain a healthy lifestyle. Insurance scores have been very stable as a risk indicator, and have shown stability even during the global pandemic. Moran: Since it’s calibrated on long-term behavioral aspects, even though the death rate is up, the pandemic has not affected our TrueRisk® Life credit-based insurance scores one basis point. Credit-based risk scores, specifically from our product TrueRisk Mike Moran Life (TRL), helped both the carrier and consumer during the pandemic, when no one wanted to let a paramedical professional into their house and doctors were unavailable to create the reports. By enabling accelerated underwriting, TRL helped our
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InsuranceNewsNet Magazine » September 2021
existing customersgoing do significantly more business scores” forward) haveduring been COVID-19 than they did previously.
succ to more accurately assess risk and pric Reynolds: Moving forward, this speed to market will personal automobile and insu continue to be crucial. Consumers more andproperty more are gravitating toward online distribution channels. Using for more than insurance two decades. insurance scores ensures carriers areThe able life ins to accurately predict risk, and it provides products to industry, inthat contrast, has only recently customers at a price accurately reflects the cost of insurance, allowing products to be delivered much deploy them for life insurance underw quicker, which is what people want in the digital age. Q: How are insurance risk scores calculated? Insurance risk scores provide
significa in an digital-forward Moran: The increasingly gold standard has always been the Social indus Security Death Master file (pre-2012), which was our life insurance the source document when weproviders built TrueRisk also Life. Ofrealize the approximately 800 credit attributes of a consumer, we enable morethat accurate premium identified 25 categories were predictive of mortal- pricing ity, which can be put into four buckets. there may be concerns as to the releva The first provides a consumer’s credit profile, like the length credit history and number ofto credit lines. A onof credit information underwrite cu second bucket is shopping codes, which include applications for loans and as credit cards. The third is the conespecially the COVID-19 pandemic r sumer’s utilization of credit, such as average balances, debt United to credit limit. The fourth bucket is the derogatory States economy. codes, such as bankruptcies, collection delinquencies. This is not a credit score. The TrueRisk Life score is calibrated to mortality. We use long-term attributes. Somebody can’t just make changes in their financial credit management to move the TRL score.
Q: How else do data solutions benefit insurance carriers? Moran: TransUnion is best in class with its matching capabilities. We have credit data on some 350 million credit-active consumers. To be able to identify the right John Smith is spectacular. Furthermore, we use non-credit data as well to provide a diversified solution suite from cradle to grave, through the whole life cycle. Reynolds: We can help carriers target the most profitable customers. We can help them properly segment risk and underwriting, make sure that they can verify the identities, especially digitally, and also allow them to monitor policies to keep the information current and accurate, and fulfill their fiduciary responsibilities as a © 2021 TransUnion. Allthem Rights | Page 1 | 20-866765 life carrier, by notifying if Reserved there has been a mor-
