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Brett Laker. (Photo: UnderwriteMe)

Life Health > Life Insurance > Permanent Life Insurance

Life Insurers Need to Balance Speed With Risk Assessment: Brett Laker

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What You Need to Know

  • UnderwriteMe systems help life insurers understand the applicants.
  • Laker says technology can help insurers reconcile the need for speed with the need for careful risk assessment.

Brett Laker helps life insurers figure out how dangerous their clients are.

Laker is the head of North America at UnderwriteMe, a life insurance underwriting technology firm that is owned by Pacific Life’s reinsurance arm.

Your clients might turn to life insurers to protect loved ones’ financial well-being, and to use life insurance and annuities in retirement income planning arrangements.

Life insurers use systems from UnderwriteMe to predict whether applicants are more likely to die much sooner than expected or live longer than expected.

Laker has been in his current post since May 2021, and at Pacific Life since 2011. Before that, he worked in underwriting at Manulife Financial and Sun Life Financial. For much of that time, he handled applications for corporate-owned life insurance and reinsurance.

Much of the COLI was underwritten on a guaranteed issue or simplified issue basis.

He has a bachelor’s degree from the University of Guelph.

Laker answered questions via email about how he got into the world of life insurance underwriting technology, what the underwriting systems have in common with amoebas, and the reality that an underwriting system — like an amoeba — must squeeze some things out.

The interview has been condensed and edited.

THINKADVISOR: What took up the most time and energy last year, and what did you learn from that?

BRETT LAKER: We launched our official North America expansion in 2021 and recently completed our first U.S. client implementation, with one of the largest carriers in the market.

In addition to that focus, we have spent a great deal of time meeting with potential customers, third-party data providers and even competitors to discuss and learn more about what people feel are the current and future needs for underwriting.

It has been a year of education, understanding and, ultimately, revelation.

Through it all, I was reminded how supportive and collaborative our industry can be, as we contribute different pieces to serving the needs of the greater life insurance ecosystem while bringing protection to those that need it.

What are you focusing on the most right now?

Underwriting has been going through a renaissance over the past five to 10 years, but COVID really put a lens on the inefficiencies and gaps that we still need to close to improve the consumer experience without sacrificing proper risk assessment.

We are focused on improving the underwriting automation process to increase “straight-through processing,” or STP, rates.

The challenge here is being able to accomplish this even when electronic health records or attending physician statements are required.

By using a combination of our Underwriting Engine and a medical records text-mining tool, we want to make it easier to use multiple evidence sources to provide proper, focused risk selection, whether that be through STP or providing better tools for underwriters.

What forces out there are helping, and what forces are hurting?

There is so much going on in this space.

I think insurance companies and other users of insurtech are experiencing option fatigue.

Compounding that is striking a balance, from transitioning to a very individualized data/predictive approach, from underwriting from the more traditional, pre-defined, age and amount requirements that applied to everyone within a set category.

Mortality experience for life insurance generally takes years to emerge with enough data to be credible. Determining if making significant changes to risk selection today was the right decision won’t be immediately evident.

What do you think your market (or your specialty, or the world) will look like five years from now?

Without the benefit of a crystal ball, I envision multiple approaches to underwriting based on a flexible environment, as one size won’t fit all markets, carriers or products.

If you can humor me for a minute, I like to compare underwriting to a living cell analogy: I would say the front end (sale) is the mitochondrion that powers the journey.

The Underwriting Engine would be akin to the nucleus, for managing and controlling the process.

A data hub (we call it Decision Studio) manages all of the data flow and directs the stages of the process, so that it seems to align with the endoplasmic reticulum, which passes the information to the workbench/admin system, which I’ll say is the Golgi apparatus, as it sorts, modifies and decides if something stays in the cell or leaves.

The living/dynamic nature of a cell is what we expect underwriting to look like going forward, so the underwriting experience can be easily and automatically be tailored to improve the customer experience without sacrificing risk protection for the insurance carrier.

This in turn means we keep mortality-related costs in check and increase accessibility to life insurance to more people.

What, if anything, should readers or other players, such as industry groups and members of Congress, be doing to bring about positive change?

The regulatory environment for life insurance in the United States is a double-edged sword.

While the consumer-focused protective value is warranted, we need more flexibility for reflexive questioning and choice of evidence for risk assessment that doesn’t require onerous regulatory filings.

The industry’s goal of improving the consumer journey is critical to our future success … but not at the expense of proper mortality risk selection.

Having a mind open to a more flexible, option-rich underwriting process that can also improve the buying experience should help strike the balance between those two needs.

Pictured: Brett Laker. (Photo: UnderwriteMe)


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