Other Risk Controls

Question 1

why we apply limited underwriting for group life policies

Answer 1

Lives covered by group policy should be lower risks:
actively at work, healthy
reduce anti-selection risk
cover amount linked to salary, no over-insurance
Reduce insurer costs
Convenience for employers and employees
Speed up processing and payments
Stay competitive if other companies also limited underwriting

Question 2

importance of underwriting in risk management

Answer 2

Protects from anti-selection
Help classify risks into homogeneous groups
Identify risks where special terms are needed
Help find the most suitable approach and level for a special term
Help ensure claims experience does not depart too far away
reduce the risk of over-insurance for large proposals

Question 3

reasons for less strict underwriting approach

Answer 3

actual claim experience suggest that less underwriting would be insignificant

currently a large margin between actual and expected mortality experience

excessive costs led to re-evaluating the benefits vs costs

competition may moved to less stringent underwriting

cheaper less invasive medical tests yield similar insights

technological improvements in testing

asking more and smarter questions upfront

increasing the base mortality assumption for compensation

some underwriting criterias were unnecessary

medical improvements led to better mortality performances