Munich Re U.S. life has validated LexisNexis Risk Classifier as an effective predictor of mortality for the U.S. insurance-applicant population, after assessing its effectiveness in stratifying the mortality risk profile of a pool of insurance shoppers.
LexisNexis Risk Classifier is a proprietary scoring algorithm that includes public records, credit information and motor vehicle history to predict the relative mortality risk of individuals.
Patrick Sullivan, senior vice president, integrated analytics at Munich Re, said; “Accelerated underwriting programs for life insurance offer better customer experience through faster time to issue and less intrusive underwriting.
“When fluids aren’t used in underwriting, it becomes important to optimize the use of remaining information to best manage mortality risk.
“Our validation of LexisNexis Risk Classifier confirms that the score effectively stratifies mortality risk across attributes. Alternative data-based mortality scores offer a new dimension of mortality risk that is not reliant on medical information, improving the fit of mortality predictions on top of health-based underwriting criteria.
“At Munich Re, we believe it’s a valuable tool in managing the extra mortality risk associated with accelerated underwriting programs.”
Munich Re advises insurers considering alternative data-based mortality scores to begin with a retrospective validation study on their own experience data to assess the impact of applying LexisNexis Risk Classifier to their unique target market, distribution, and underwriting process.
Patrick Sugent, vice president, analytics, LexisNexis Risk Solutions, added that although historically consumers had to accept higher premiums in exchange for a less-invasive and time-consuming underwriting process; “LexisNexis Risk Classifier helps provide a fast and easy process for consumers, while at the same time helping life insurers minimize the risks ordinarily associated with expedited underwriting.
“Individuals who would not have bought life insurance because of the cumbersome process now have the opportunity to buy a life policy because the purchasing process is easier than ever.”
