COVID-19 and Fast Underwriting Are a Bad Mix: Veteran Underwriter

Hank George, a longtime life insurance underwriter, says life insurers may need slow, careful underwriting to protect themselves against the effects of the COVID-19 pandemic.

George makes that case in a commentary published in Contingencies, a publication put out by the American Academy of Actuaries. The academy is a nonprofit body that seeks to shape and promote the actuarial profession.

Many academy members are working to help life insurers reduce use of blood tests, urine tests, and attending physician statements in the life insurance underwriting process, to increase the number of people who can buy coverage quickly online, through mostly or entirely automated underwriting processes.

The academy has a disclaimer under George’s article stating that “the views in this article are those of the author and do not necessarily represent the official views of the American Academy of Actuaries.”

George, however, contends that “accelerated underwriting” or “simplified underwriting” programs may be a poor fit for the post-COVID-19 era.

One problem is that high unemployment rates may cause or aggravate mood disorders, George writes.

Resources

• A copy of Hank George’s commentary is available here.
• An article about consumer group representatives’ concerns about predictive analytics-based underwriting systems is available here.

Even with a traditional underwriting process. “mood disorders reduce life expectancy by an average of eight years in men and six years in women,” George says. “Underwriting psychiatric illness is more difficult than for most medical conditions.”

George says the COVID-19 lockdown may also lead to a second epidemic: forgone care for life-threatening disorders, such as tumors, and strokes.