The world of life insurance underwriting is shifting fast, with new challenges emerging on multiple fronts. From artificial intelligence reshaping risk assessment to ever-evolving regulations and complex financial considerations, underwriters must stay ahead of the curve. 

In Part Three of our series on the 2025 Pacific Life Underwriting Symposium, we bring together industry experts for three engaging discussions: one exploring the power and pitfalls of accelerated underwriting and AI, another tackling the regulatory hurdles shaping the market, and a third evaluating business and financial underwriting strategies. 

Join us as we look ahead at the future of underwriting and what it will take to navigate this dynamic landscape with confidence.

Accelerated underwriting has seen tremendous success, but it is still evolving. There remains significant potential to further refine the process—reducing misrepresentation while enhancing collaboration with producers and distributors to streamline policy sales. As new tools and advancements in data usage emerge, these improvements will shape the future of underwriting.

From the outset, some level of mortality slippage was expected in accelerated underwriting models. While electronic health records and artificial intelligence (AI) provide valuable assistance in mitigating these issues, they are not a standalone solution. A multifaceted approach is necessary to improve risk assessment and enhance accuracy.

One challenge in the industry is that different carriers implement accelerated underwriting in slightly varied ways, creating confusion for distribution channels. Establishing clear objectives and involving distribution in the process is essential for ensuring smoother operations and consistent expectations.

As underwriting moves forward, larger cases will become increasingly influenced by data-driven insights, enabling a greater degree of personalization. However, regulatory issues pose a significant hurdle, particularly regarding concerns about unfair discrimination in data-driven underwriting models.

The conversation around AI also includes the distinction between traditional AI and Generative AI. While AI functions within established parameters to deliver consistent results, Generative AI produces variable responses—something regulators often find unacceptable. Generative AI is particularly useful for summarizing Attending Physician Statements (APS) and other documents, though it cannot be used for making offers. However, its applications extend to marketing efforts, such as emails, product explanations, letters, and videos, making it an asset at the point of sale. 

To optimize AI's potential, it is beneficial to integrate AI chat tools for queries and insights. Some industry professionals utilize AI-driven platforms like Palantir to review reinsurance treaties and related processes, finding them highly effective for detailed analyses.

The key to successfully harnessing AI lies in setting strategic guardrails to ensure reliable results. Investing time in understanding AI's capabilities through continuous exploration will help professionals unlock its true potential. A smart approach is to start small, gaining familiarity with AI functionalities before scaling efforts. Partnering with experts can also offer valuable guidance.

For those looking to deepen their AI knowledge, resources like Perplexity.AI and Google's deep research tool are excellent starting points. These platforms provide a strong foundation for exploring AI applications and their evolving role in underwriting and risk assessment. As technology progresses, AI will continue to shape the future of underwriting, offering new efficiencies and insights for industry professionals. 

The rise of artificial intelligence in insurance and underwriting has prompted significant regulatory developments. In December 2023, the National Association of Insurance Commissioners (NAIC) introduced the AI Model Bulletin, designed to govern AI usage in the industry. Several states have since adopted these guidelines, which address key concerns such as privacy and data protection.

States including Colorado, California, New York, and Texas have taken distinct positions on data usage, influencing how the life insurance industry operates. As AI-driven underwriting expands, insurers must carefully collaborate with regulators in these states to ensure compliance while continuing to leverage data effectively.

One of the most critical challenges in AI-powered underwriting is ensuring fairness, particularly in areas like racial bias. To mitigate discrimination, the industry must conduct fairness testing, examining multiple factors to assess whether AI models operate equitably. Proxy information is often used in this process, serving as an indirect method to detect potential bias.

While testing AI models is essential, it can also slow innovation. However, this step remains necessary to prevent unintended consequences and ensure responsible AI deployment. Many organizations are now leveraging AI itself to test for fairness and certify underwriting models, helping to refine processes and enhance accountability.

Companies like AWS are taking a proactive approach by using automated reasoning for testing AI applications. This method ensures models perform reliably while adhering to regulatory standards. As AI integration in underwriting continues, balancing technological advancements with ethical oversight will be key to shaping a fair, transparent future in the insurance industry. 

Estate tax preservation underwriting remains unchanged, as there are currently no plans to eliminate the estate tax. This stability allows financial professionals to continue structuring policies with confidence, ensuring that high-net-worth individuals have the necessary protections in place.

Cover memos play a vital role in underwriting, serving as essential documents that explain the details of a sale, including how amounts are determined or calculated. Underwriters rely on these memos to assess cases accurately, making them a crucial part of the process.

While uncommon, influencer and Name, Image, Likeness (NIL) sales present unique underwriting challenges. Several factors need to be considered, such as the source of funds, contract existence and guarantees, and the applicant's assets. To gauge lifestyle and financial standing, carriers often conduct internet searches. Because many NIL applicants are young, valuable physician records are often unavailable, making a well-prepared cover memo especially important. Additionally, carriers typically do not allow long-term care (LTC) or term coverage for these applicants, and athletes may face team-imposed limitations or privacy concerns. Overall, insurers show limited interest in offering policies to young individuals with substantial wealth in these scenarios.

For large or jumbo case underwriting, precision is paramount. When handling super jumbo cases, collaborating with a leading carrier ensures effective layering and stacking, especially when reinsurance is involved. Choosing an experienced carrier can streamline the process and provide the necessary support for these complex transactions.

Multigenerational family sales add another layer of complexity. A comprehensive cover memo detailing the sale, financial relationships, and wealth distribution strategy is essential. Key considerations include who controls the family's wealth, its origins, and its long-term distribution plan. Trust establishment and funding must also be accounted for. Given the unpredictability of financial and generational shifts over 30 to 40 years, securing coverage becomes increasingly difficult with each successive generation. Insured individuals closer to Generation 1 generally find it easier to obtain coverage, while subsequent generations face growing challenges. 

Business cases, particularly those involving startups and venture capital, can also be difficult to underwrite. These businesses often experience negative cash flow, with the insured "key person" earning a modest income. To justify coverage requests, consistent and well-documented financial records—supported by thorough cover memos—are essential in demonstrating the need for insurance.

In each of these cases, clear documentation and strategic planning are crucial to navigating the complexities of underwriting. Whether dealing with estate tax preservation, NIL sales, jumbo cases, or multigenerational wealth transfers, a well-prepared approach ensures smoother transactions and better outcomes.