With record breaking attendance and an outstanding lineup of content and speakers, AHOU 2023 was a big success. Speakers from across the industry shared their knowledge, expertise and yes, their war stories, regarding the latest trends in life insurance.
While the conference covers many topics from career management to technological innovations to discussions on the latest medical advances, there were some recurring themes across several presentations that resonated with the MIB team. Those include types of fraud and fraud prevention, innovations in risk assessment, use of AI or Chat-GPT, and digitization.
Patti DeWitt, Vice President, Member Services
Topic: Fraud detection and prevention
It is no surprise that fraud detection and prevention was a hot topic of conversation across many panels at AHOU. Whether the focus be on mitigating misrepresentations, managing live rescissions or stories about systemic fraud, the accounts and stats that were shared were staggering. According to one presentation, life insurance fraud costs the industry $74.7 billion annually (source: Coalition Against Insurance Fraud and Colorado State University Global).
Several sessions at AHOU referenced the Checking Service, IAI and Plan F as key underwriting tools that defend against non-disclosure and misrepresentation, reinforcing that MIB Code Solutions continue to be a mainstay in fraud prevention and detection in the life insurance industry. While MIB Code Solutions continue to be a critical part of the underwriting journey, MIB is actively working to enhance our solution to address the evolving insurance landscape. At AHOU, our team had the opportunity to discuss this with our members and ask how MIB can help to address their emerging needs. Several members expressed strong interest in having the MIB codes align more strongly with automation and advancing technologies. As a result, MIB will be pulling together a focus group to help us determine the best path forward to evolve our codes, so they work more effectively with automation, while simultaneously maintaining the protective value they provide across all forms of underwriting.
Jessica Caracofe, Director of Underwriting Innovations
Topic: Innovations in risk management
One of the great things all of us gain from attending AHOU is a sense of community and comradery. Though many who attend are competitors, we are able to put that aside and share our stories, knowledge and best practices for the benefit of the common good. This type of sharing is very familiar to us at MIB – it’s how we do business every day through managing our Code Solutions and In Force Data Solutions. Both contributory databases are managed by MIB but populated by the industry, for use by the industry. The protective value they provide represents the impact the industry can have when we come together.
With the industry’s quest to innovate risk assessment, putting the right tools in place is critical to managing adverse selection and detecting fraud. When we first introduced MIB’s In Force Data Solutions, the buzz centered around mitigating Jumbo risk. Armed with the ability to verify an applicant’s in force policies and pending applications, an underwriter can financially justify the accurate total line being pursued, prevent over-insuring, monitor capacity, and jumbo risk. But that isn’t where the value ends, and at AHOU 2023, a newer message emerged.
Our Total Line Alerts were mentioned in several breakout sessions as a unique tool to help monitor field behavior and detect fraud. The ease of applying for life insurance breeds opportunity for shopping and stacking to avoid underwriting requirements. Knowledge of “multiple early lapses” was cited to detect recent trends in producer commission fraud and churning activities. By including terminated policy data, Total Line Alerts provide a holistic view of an applicant’s insurance history which companies haven’t had until now.
I wonder how many companies know their revenue lost to early lapsed policies, NTO’s and bad agent behavior? I also wonder what is spent annually on post-issue underwriting and rescissions. Placing fraud-detection tools on the front end of streamlined underwriting processes to help solve these challenges just makes sense.
Carolyn McAvinn, Director of Underwriting Innovations
Topic: AI and Chat-GPT
In 2022, the conversations around electronic medical data during the AHOU breakout sessions focused primarily on data access and hit/release rates. This year, of the five sessions that I attended, a common focus was on the use of AI or Chat-GPT and how it will be utilized within underwriting. More specifically, discussing if it SHOULD be used within the underwriting process.
What resonated with me was not necessarily the questions asked, or the answers provided by panelists, but the overall focus on this particular innovation. There appears to be a black and white perception that AI or Chat-GPT has to be seen as either good or bad, turned on or turned off, used or completely avoided. AI and Chat-GPT are clearly innovations getting a lot of hype within our country, including concerns around the need for caution, which trickles down to our industry. And as we consider the merits of this technology, we need to be mindful that we do not need to decide definitively that the technology should or should not be used. Instead, our focus should be on gaining an understanding of the opportunities the innovation provides as well as the challenges (regulatory, mortality/morbidity, user experience, etc.) that will need to be addressed if and when it is used.
Advancements in technology, including solutions inclusive of AI and NLP, always have their pros and cons. And they will not go away – there will always be a new innovation that causes us to reconsider how we do things. These emerging innovations simply need to be massaged and adapted to our product solutions, use cases, workflows and industry needs as a whole. They can be a game changer in providing guidance and assistance within the underwriting process. Ignoring technological advancements is not a viable business strategy in the competitive environment of insurance sales. Our mindsets must embrace a culture of learning and understanding the potential value these innovations can provide for us to advance the industry and be successful.
Bill Walasek, Head of Sales, Paperless Solutions Group (PSG)
AHOU reinforced that digitization is one of the most, if not the most, prevalent topic on everyone’s mind. The “innovate or be left behind” theme was ever present whether on the main stage during “Shark Tank,” in break out session discussions or as we held individual conversations with attendees. Both carriers and distributors are faced with a difficult decision - do we invest in technology? And if the answer is “yes,” do we build it or buy. This leads to some very interesting conversations as companies contemplate whether they have the internal resources not only to build a system, but more importantly to maintain it. The cost/benefit needs to be assessed carefully, as does the fit of potential outside resources. In several conversations it became apparent that many companies struggle to understand how to assess the many different options and approaches that are available. Our advice if you look to an outside resource is to ask three key questions:
At PSG, we work to understand our clients and provide flexible solutions that help you navigate your digital transition in a cost efficient and timely manner. We focus on software that is innovative and customizable to fit your individualized needs. As a part of the Digital Solutions portfolio, our services are a perfect complement to MIB’s Code Solutions, Medical Data Solutions, and In Force Data Solutions, which help insurers manage risk, gain efficiencies and grow profitably.
The conference always represents a great opportunity for the MIB and Paperless Solutions Group (PSG) team to meet with our members and customers face-to-face, hear what the industry has to say about their latest challenges, and share information about our latest innovations. Our team was excited to participate as attendees as well as exhibitors, organizers (Jess Caracofe serves on the AHOU executive committee) and panelists. But what made us even more excited was to hear several speakers among our membership reference our tools in their own presentations!
We look forward to more of the same at AHOU 2024!