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A Score for All Seasons: Big Data and Credit Scores Bring Big Changes to Life Underwriting

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What life insurer doesn’t want to provide coverage to customers with just a click – instead of a needle prick? But even as customers shun invasive medical tests, insurers still depend on blood and other paramedical exams to underwrite, especially when assessing preferred risks.


Enter TransUnion TrueRisk® Life, a credit-based insurance score that models credit-based behavior and is predictive of mortality and lapse risk. TrueRisk® Life can accelerate the underwriting process and help insurers make more (and more competitive) offers to qualified applicants. This score, used in combination with existing underwriting practices, provides a more holistic, nuanced picture of each applicant’s risk profile.

Big Data that Delivers

TrueRisk® Life was developed by credit industry leader TransUnion and validated by RGA using the accumulated credit histories of millions of people over a ten-year period. Data scientists identified a subset of predictive credit data in which patterns could be observed and correlations made.

The bottom line? Credit-based behavior does matter when assessing the risk of a life insurance applicant. RGA actuaries validated this and concluded that certain credit-based behaviors reflected in credit data do affect a person’s risk related to life expectancy. TrueRisk® Life adds another dimension to traditional underwriting evidence such as family medical or prescription drug histories. In fact, the score is most powerful when used in conjunction with medical data to more precisely evaluate risk. Our research also suggests those individuals who demonstrate responsible credit behavior with regard to these correlated credit attributes could be more apt to keep life insurance policies in force.

Credit scoring has long been used to simplify the process of buying a car, insuring a house, or applying for a credit card – but TrueRisk® Life’s development differs in important ways. It was purpose-built, developed specifically for life insurance risk assessment. It also does not include shopping, credit card transactions or income data. Perhaps most importantly, TrueRisk® Life is subject to the Fair Credit Reporting Act (FCRA), federal legislation that governs the collection, assembly and use of consumer report information.

Benefits for Carriers and Customers

The benefits are clear.

Insurers can more effectively penetrate underserved markets by offering faster underwriting decisions at competitive retail rates. TrueRisk® Life can improve customer targeting for increased sales and placements. The score can improve persistency as the carrier adds the risks with the better scores into a book of business. Also, RGA helps clients incorporate the TrueRisk® Life score into existing underwriting platforms and shares in the risk through traditional reinsurance.

Customers with favorable TrueRisk® Life scores can gain greater access to preferred risk classes and accelerated offers – limiting the need for invasive and time-intensive medical tests.

To stay competitive in a new era of accelerated underwriting, carriers must gain deeper insight into applicant behaviors. TrueRisk® Life is a powerful tool; it is just the beginning of what will be possible in the near future.

Contact the RGA client services team to learn more about the predictive power of credit data in risk assessment. 

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