Robo Underwriters May Need Tough Bodyguards: Moody’s Analysts
November 6, 2019 by Allison Bell
Life insurers’ new, automated underwriting processes could make customers happier, speed up sales and cut costs — but one risk is that cyber crooks could come after the underwriting data streams.
Kripa Thapa and other analysts at Moody’s Investors Service talk about the rating implications of automated underwriting processes in a new U.S. life insurance sector commentary.
About 40% of the world’s life and health insurers are now using “predictive analytics” systems, or statistical forecasting systems, in the underwriting process, up from 14% in 2013, according to Reinsurance Group of America Inc. survey data cited in the Moody’s commentary.
Moody’s and other rating agencies give ratings, or grades, that provide a rough indication of how likely a large borrower is to be able to pay off its debts, and how likely an insurer is to be able to meet its life insurance policy and annuity obligations.