The reinsurer found the performance gains compelling but was more intrigued in the new model’s ability to identify more insurable applicants and issue more business.
In a first look at the latest Irix Risk Score 4.0 (Rx, Dx and Rx, Dx, Cr) models, Swiss Re found stronger mortality stratification than Risk Score 3.0. Just as important, the results opened new questions about how richer data can help carriers identify more insurable lives, refine cut points, and improve automated underwriting throughput.
- Swiss Re found that Risk Score 4.0 improves accuracy which holds across product lines and age cohorts, creating the opportunity for carriers to employ varying cut-point strategies.
- The reinsurer called out Risk Score’s new ability to differentiate between smokers and non-smokers, noting the potential value in evaluating distributions and relative mortality for both cohorts.
- Adding Credit Data was particularly impactful for younger applicants (under age 30) by augmenting this population’s prescription and medical histories.
- Adding Credit Data reduced no-hits to just 3%, which they noted was important when optimizing accelerated underwriting throughput.
Swiss Re found that adding Credit Data didn’t just improve Risk Score’s ability to segment younger applicants. In a majority of cases, it resulted in lower scores—suggesting that in many cases, Credit Data may enable the identification of more insurable lives and/or enable faster processing.
Better model performance matters. More critically, Risk Score also enables better accelerated underwriting decisions, greater confidence in risk selection, and more opportunities to issue business.
“For the first time, we have tobacco indications, allowing us to evaluate distributions and relative mortality with known tobacco users excluded.”
Credit attributes have seen a resurgence in life insurance underwriting. Swiss Re’s review of Risk Score 4.0 helps to explain why. Read more here (page 3).
