RGA’s Underwriting Initiatives

Jaime Correa CLU, FLMI

September 13, 2018

SVP, U.S. Mortality Markets Underwriting

2

U.S. Underwriting’s Role with Initiatives

U.S. Underwriting is comprised of … • Facultative Underwriting• Fac. Exclusives• Underwriting Services • Medical

These teams support RGA’s leadership position in a number of ways, including …• Facultative underwriting support• Development and active management of innovative

underwriting services that benefit our clients

3

RGA’s Focus on Initiatives

Sharing risk with our clients through traditional reinsurance business

Leveraging our talents and spirit of innovation to develop new solutions that help our clients today

Analyzing trends and applying our expertise to stay ahead of tomorrow’s needs to support the growth of our clients and the insurance industry as a whole

Help our clients assess new risk management tools and take risks alongside clients

4

What We’ll Be Covering Today

Helping you underwrite today

Supporting the evolution of underwriting

The Future of Underwriting

Q&A

Helping you underwrite today

6

Superior Client Communication and Outreach Fac Call Desk

RGA Central (web portal)

GUM Underwriting Manual

Webcasts

Advisory Groups

Industry participation in conference and associations

Annual RGA University I & II

YES Program (Year End Support)

360-degree Client Assessments

Regional Newsletters, Articles, White Papers and Presentations

GULF (Global Underwriting Learning Framework)

Code 190 - Call Client with Decisions

7

Diverse and Extensive Specialties

Underwriting Risks• Aviation• Avocation• Foreign Risks• Fraud and Criminality• Genetics• Military• MVR• Occupations

8

Diverse and Extensive Specialties

Topical• e-Underwriting• Rules development• Digital Health Records• Dynamic underwriting

9

Diverse and Extensive Specialties

Services• Strategic Underwriting Programs• Audit and Risk Management• Rx scoring• Fac Call Desk• Training and Education

10

What is ASAP?

Introduced in 2006, ASAP streamlines process for electronic submissions of facultative cases for immediate decision

ASAP currently offers 34 individual and 18 dual impairment options

Support and direct access to our underwriters available through the Facultative Call Desk

Winner of 2012 Best Innovators Showcase award for web-based underwriting process

On January 2016, the 100,000th case was submitted to ASAP

Recognized as the leading automated facultative decisioning tool

11

ASAP Benefits

ASAP can improve placement rates and …• Help recover underwriting costs• Improve agent satisfaction• Leverage RGA’s underwriting expertise and reinsurance

capabilities in ways that benefit all parties involved

ASAP’s greatest benefits are higher placement rates as a result of …• More competitive offers• Fast, easy and secure case submissions• Direct support from RGA underwriters via the facultative

call desk

12

Preferred Offers Now Available for Some Impairments Preferred offers available on twelve (12) key impairments

• Abnormal A1C/blood sugar – no diabetes history

• Elevated triglycerides

• Foreign travel/foreign nationals

• EKGs

• Occupations

• SCUBA diving

• Liver function testing

• Asthma

• Treated hepatitis B

• Albumin/globulin

• Sleep apnea

• NTproBNP

Targeted impairments for preferred will not conflict with carrier’s current preferred guidelines for build, blood pressure and cholesterol

13

Strategic Underwriting Program (SUP)

Supports fluctuating staffing needs due to periods of high volumes or vacation

Underwrite cases, including final decisions

Review supporting documentation

Advise on requirements

Provide MIB codes

Provide reasons for adverse underwriting actions

14

Developed the RGA Rx Scoring Model

Severity-based scoring system (1-100) for all drugs on RGA-hosted system• More than 65,000 combinations scored using multiple variables,

including age, gender, route of delivery, time since last fill, number of fills, and physician specialty

Provides up-to-date listing of Rx information via leading third-party provider

System and rules updated on an ongoing basis

Team of Rx experts, including underwriters, medical directors, actuaries, technologists

15

Benefits for Client Companies Using RGA’s Rx Scoring

Minimizes costs by saving underwriters’ time

Enables faster decisions

Increases protective value by uncovering non-disclosed medical conditions

Flags concerning medications

Eliminates costly human mistakes

Translates large volume of data into actionable information for an underwriter

16

Next Generation of the RGA Rx Scoring Model

Applies a predictive model to generate a holistic view of the Rx report

Factors in drug-drug combinations and alternative indications

Can be customized by client and product

17

What is TrueRisk® Life?

A credit-based behavioral index highly predictive of mortality and lapse for use across the life insurance policy life cycle

A new piece of evidence that will transform the life insurance industry through unique insights into mortality and lapse

With the growing underinsured middle market, aging distribution group, and increasing consumer demand for instant transactions, insurance carriers need to quickly assess risk with a high level of confidence in a way that does not inconvenience the customer

A new source for improved risk selection, segmentation and efficient underwriting

18

TrueRisk® Life Presented as a Score from 1-100

HigherNumbers

Higher Risk

Lower Numbers

Lower Risk

19

TrueRisk® Life DeliverablesProvides the transparent drivers behind the model

TrueRisk® Life Score1

Reason Codes2

Credit Report3

20

Applications Within Life Insurance

Improved Risk Segmentation• Fully or Simplified Issue Underwritten Environments

Accelerated Underwriting

Targeted Marketing

In force Policy Management • Lapse and Mortality Insight• Cross-sell or Upsell Existing Customers• Engage Orphaned Policyholders

21

Drivers with an MVR infraction experience higher all-cause mortality than those with a clean driving record1

The study noted that because the focus was on all-cause mortality, the additional mortality did not necessarily come from automobile accidents:

“It is possible that those who use cell phones while driving engage in other risky activities, thereby

increasing their overall mortality risk.” 1

1 RGA Global Research & Development Research Bulletin, May 2014

RELATIVE MORTALITYThose with MVR infractions

compared to those with a clean recordDistraction-affected MVR infraction 137%

MVR infraction – other than distraction-affected 117%

Clean driving record 100%

22

DriverRiskSM has shown to be an effective indicator of MVR violation activity for the auto insurance industry

Proven to save auto insurance carriers on MVR expenses when used as an alert in front of the MVR order

Alerts to the presence of violation activity so a carrier knows when to pull an MVR or when to avoid an MVR

TransUnion’s court record-based traffic violation product is now available for the life insurance industry

$ $ $ $ $ $ $$ $ $

70-80% of drivers will have a clean driving record

23

Identify when applicants or policyholders have ratable violations that meet your criteria

Customize alert criteria by: state, violation type, and violation disposition

Avoid MVR orders for “clean” drivers without violation activity

Receive an at-a-glance snapshot of all activity for each driver: number of violations, number of ratable violations, out-of-state violation indicator, and recent conviction indicator

The DriverRiskSM Alert provides at-a-glance method for determining next action An enhanced court record violation data solution

AlertHit: At least one violation conviction was found for the subject within the license key search parameters

Not Found: No violations were found for the subject within the license key search parameters, AND the PII provided on input was not verified

Clear Hit: At least one violation was found for the subject within the license key search parameters, but no convicted violations were found, OR no violations were found but the PII provided on input was verified

Alert Output

Supporting the evolution of underwriting

25

Digital Health Data: Good News, Bad News

Good News: More Data• Lifetime medical history• Multiple sources• Discrete data• Records on demand

Bad News: More Data• Volume of data (thousands of pages in some cases)• Disparate formats, hybrid records• New standards, vocabularies, etc.• Access, sharing, matching

26

The Goal for Digital Health Data in Life Insurance

Better health data and better availability of health data

More efficient and effective model for delivering insurance, especially in the middle market

Enhance our capabilities using physician statements/reports

27

Long-Term Strategy

Holistically assess the structured and unstructured data elements in DHDs• Structured data (SNOMED CT, RxNORM, LOINC,

CPT, vitals, age, and gender)• Unstructured data (free-form text from the doctor’s

notes, consults, encounters, etc.)• Images (EKGs, x-rays, etc.)

Look for opportunities to “exercise” our scoring tools with different sources of data

The Future of Underwriting

29

An Ecosystem of Opportunity

Future Advancements• DHD• Rx predictive model• Smoker detection• Combination of scores• AI, machine learning

AURA• Automated underwriting engine• Comprehensive evaluation

of TrueRisk® Life, Rx scoring, MIB, MVR, labs, reflexive questions

Dynamic Risk Selector• TrueRisk® Life

and underwriting rules• Accelerated underwriting

TrueRisk® Life• Behavioral index score• Predictive of mortality

and lapses

Rx Scoring• Prescription history scoring• Predictive of mortality

Proprietary and confidential. For internal client use only.

©2017 RGA. All rights reserved.