Several underwriting tools have been adopted by carriers to issue coverage faster, in many cases without the need for insurance exams or requirements such as a traditional APS. Some of these tools are new, while others have been in use previously, but have recently been enhanced to streamline the underwriting process.
These tools often impact cases that run through an accelerated or streamlined underwriting process (for purposes of this blog, we will refer to such processes as "expedited underwriting"), and may also impact cases that follow a more traditional underwriting path.
Information and data are the basis of these tools, expressed in a manner to speed up and enhance underwriting, and designed to automate either parts of, or the entire underwriting decision-making process. Some tools are also intended to provide a greater degree of underwriting accuracy to help ensure consistent, appropriate underwriting offers given the relevant facts at hand.
Below are some of the new and enhanced underwriting tools in use today. These may only have modest impact upon your cases at present. However, it's critical to understand what they are and how they work, since advancements like these often find their way to broader use on all types of business as time goes on.
Pharmacy checks (ScriptCheck, Milliman IntelliScript):
Pharmacy checks have been around for several years, but have been greatly enhanced. They are used in expedited and traditional underwriting processes. Applicant prescription history is gathered from Pharmacy Benefit Managers, and includes drug name, description of type/class of drug, name, address and specialty of medical source providing prescription, refill information and several other data points. Enhancements have been made to this tool including identifiers whether a prescription may be problematic, either alone or in combination with other medications, from an underwriting perspective. Also, with IntelliScript, a mortality score may be provided based upon prescription history.
LexisNexis Risk Classifier and Transunion TrueRisk Life
The LexisNexis Risk Classifier (LNRC) and Transunion TrueRisk Life (TTRL) are used in expedited underwriting to help determine whether to forgo age/amount underwriting requirements on an applicant. LNRC is a predictive model using data and attributes from more than 20,000 data sources, including public records, driving history and credit to assess an applicant's risk profile. Alternately, TTRL is a predictive model that assesses mortality risk by using individual credit information and attributes. Neither model uses an applicant's credit score, but rather looks at attributes such as payment history, on time payment, and other data points. All information is distilled into a numeric score and provided in real time.
Milliman Irix
Irix is used by carriers in expedited underwriting processes to forgo age/amount underwriting requirements. It too is a predictive model that assesses mortality based upon a combination of an applicant's prescription drug history and credit attributes, similar to the previous tools mentioned above. Result are provided in real time as a numeric score.
LabPiQture
LabPiQture is used in expedited underwriting, and may also be used in traditional underwriting models to forgo certain underwriting requirements such as an APS or insurance exam information. LabPiQture aggregates clinical lab data gathered by Quest Diagnostics and LabCorp — two of the largest providers of clinical laboratory testing in the US — which medical providers and hospitals use for lab processing. Information includes historical applicant data such as blood and urine results, pathology reports, and drug monitoring. Results are provided in real time.
Health Claims Data (Milliman Medical Data)
Health claims data is typically used in expedited underwriting models. However, this data may also be used in traditional underwriting to forgo certain underwriting requirements such as an APS. The tool provides historical applicant medical information including diagnoses, hospital and physician procedures, inpatient and clinic administered medications, and medical equipment information from medical billing records. Results are provided in real time.
Identity Verification (MIB IDV and LexisNexis InstantID)
Identity Verification tools authenticate the identity of an applicant in real time. They are used in both expedited and traditional underwriting models. Their sole use is to prevent identity fraud, and typically are requested at application submission and at times during paramedical exam completion. They are also used for other things including verifying identity for inforce policy changes or inforce transactions.
MIB Sherlock
MIB Sherlock is used in both expedited and traditional underwriting models. Criminal record checks have been done for several years. However, this tool provides a real time check of conviction information from various state court systems and departments of correction in the US.
Electronic Health Data
- Patient Healthcare Portals (Human API): Used in expedited and traditional underwriting models, this tool allows applicants to connect and share their personal health information from patient health portals with carriers. Pluses include forgoing time-consuming traditional APS requests by allowing carriers to gain access to medical information as soon as permitted by an applicant. Minuses are that not all pertinent medical information required by underwriting, such as pathology reports, cardiac testing and detailed psych data, may be obtained from a patient portal.
- Health Insurance Exchanges and Provider Networks (Clareto, MIB EHR, and Others): Used in expedited and traditional underwriting models. In many cases, APS information is often provided in real time by tapping into a network of health providers, hospital and physician networks, and Health Insurance Exchanges which aggregate applicant health information. A major plus of this model is gaining access to medical records quickly with only a typical carrier HIPAA form — the applicant is not involved in information collection. Minuses are that coverage area at this time may be spotty for participating medical sources, and not all needed information may be found from participating sources or may require a special authorization for things such as psych disorders or substance abuse histories.
As you can see, there are several new and enhanced underwriting tools in use today, and there will be additional new tools and further enhancements in the future.
For everyone's success, it is critically important to stay informed about these and other industry trends. As new ideas and processes develop and evolve, Windsor will continue to be a trusted source to share this information with you.