News that Zurich has commenced the roll-out of an AI model to streamline its ability to underwrite life insurance applications attracted strong reader interest this week…
Zurich has commenced the roll-out of an Artificial Intelligence model to streamline its ability to underwrite life insurance applications.
The insurer says it has concluded the first phase of its collaboration with the University of Technology Sydney (UTS) to develop AI models which will allow it “…to make an immediate underwriting decision on applications with mental health disclosures without the need for a doctor’s report, which previously would take as long as 22 days.”
Zurich has been working alongside UTS Rapido, a research and development hub at the university, for more than six months.
Jacqui Lennon, Head of Retail, Zurich Australia & New Zealand, says that by using AI models to assist the underwriting process “…Zurich can reduce the need to access doctor’s reports, eliminating significant friction within the application process and reducing applicant concerns around privacy.”
The models, which draw on anonymised data from seven years of past applications, identified factors correlated to a mental health exclusion being placed on an applicant, including:
- Lack of participation in sports, pastimes or recreational activity
- Occurrence of any ongoing health issues beyond mental health, such as chronic pain, cancer or heart disease
- Time spent in hospital or having medical treatment during the past five years
- Having biological parents or siblings with a health condition, such as diabetes, cancer or heart disease
The insurer notes that currently around one quarter of the life insurance applications it receives include a disclosure for a mental health condition.
…In 2023 mental health was the third most common cause for claim at Zurich, accounting for 20% of all claims…
In 2023, mental health was the third most common cause for claim at Zurich, accounting for 20% of all claims and resulting in $255m in claims payments (the total for direct, retail and group insurance, inclusive of OnePath).
It says that for some of Zurich’s retail life insurance products, mental health becomes the first or second most common reason for claim, accounting for up to 35% of claims in some cases.
John Kim, Chief Data Officer, Zurich Australia & New Zealand, says using AI “…allows Zurich to analyse thousands of data points, which would not be possible for a human to do.”
Lennon adds that beyond underwriting the models’ findings will also be key in guiding the continued delivery and evolution of Zurich’s preventative health and wellness offerings.
“In future, and data-prevailing, models like these could potentially also be used to analyse and improve the underwriting of conditions beyond mental health, such as cancer, cardiovascular or musculoskeletal conditions.”
The company says the AI models will be used to verify decisions made by Zurich’s underwriting team and the existing rules engines they use, in keeping with Zurich’s AI philosophy to ‘always keep a human in the loop’.
Also see: AI-based Life Guide Helps Underwriters.
