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The issue simplified is pushing the boundaries of pricing


Alain Thériault

September 18, 2018 07:00

Once reserved for those who are difficult to insure, products to issue short-are mutated in products simplified complete pricing. The artificial intelligence allows them to pose as the alternative of traditional products and to issue simplified.

There are only a few years, a delay of several weeks could elapse before a client is issued a life insurance policy. For a long time, the products to emissions simplified could reduce the delays, but at a higher price. Now, products with complete pricing can do that too, thanks to the artificial intelligence. And often at the same price as a traditional product.

According to Pierre Vincent, senior vice-president, individual insurance and sales ofiA financial Group and president ofiA Excellence, it is incumbent to draw a line between product simplified based on a limited set of closed-ended questions and product simplified by automation. “With automation, is an engine of inferences to consult databases in real time. This allows not to submit to the client the issues that affect its condition “, he explains.

The underwriter of a product to show simplified selects, however, the risks from a list of questions to static, specifies the senior vice president of iA. “From the responses and some of the criteria, the insurer knows what is the risk of mortality it may have. Its price will be higher than that of a traditional product. “

The revolution of the algorithms

The revolution comes from the algorithms, ” said Mr. Vincent. iA experience with its products EVO, as well as Assur & Gb ai Excellence.

“Our tools allow us to obtain the information with which we can target the right questions, specifically for each client. Thus, they may subscribe for amounts of insurance higher and higher, through a simple process. Our range of products allows a customer to 50 years of age to subscribe for an amount of $ 500,000, at a price identical to what it would cost in a selection process traditional full, ” he said.

These products of full selection can be used to take 55 % of the decisions at the point of sale. “The line between show simplified and full selection dwindles more and more. Maybe in a year or two, there will be more of a difference. “

The actuary’s training reports that the algorithm of the insurer is continuously improving in his decisions at the point of sale. “It accepts the insured at the point of sale or referred to the pricing to go into more details,” says Vincent. If the algorithm refuses the client, it says why, and if it is willing to pay a higher premium, we can say : here’s the risk and here’s how much it costs. We will continue to increase the limit of insurance and make the buying process more simple. “

Push the boundaries of acceptance

Products simplified for hard-to-insure do not have all this technological equipment. They are, however, their market well in hand.

iA provides products Access Life. Humania distributes the series of four products Insurance without a medical exam (ASSEM) life insurance, critical illness, debt and income). The two insurers say they know a lot of success with their line respective.

Canada Protection Plan also makes his bread and butter. With the support of Financial Foresters as a risk taker, the agent-general provides for a gradation of products, from the acceptance guarantee, and deferred to the product of full charging, by way of the insurance non-medical simplified that can cover up to $500,000.

“In 20 years, we have accumulated a lot of experience in this niche, which has allowed us to improve our offers, points out Peter Vincent, iA. Several customers of these products programming simplified are people more difficult to ensure. There are also healthy people who want a simple process for amounts of insurance below, for example from 100 000 $ to 150 000 $. “

Cover people denied

For his part, Stéphane Rochon, president and CEO of Humania Assurance, recalled that his company has occupied this niche for five years. The insurer claims to have been able to as well give access to insurance to a portion of the 5% to 6% of Canadians rejected other insurers, and 20% to 25% denied serious disease and disability insurance. “There is still an important place for the products simplified traditional, who are voluntarily less questions for greater risk-taking at a higher price,” says Stéphane Rochon. The automated product HuGO will not ensure that a client who has had cancer two years ago. ASSEM can. We take even if the risk is exacerbated, because all in all, this client is not so risky. “

In order to make the product even more accessible, the insurer’s account, in the month of November, raising the age for membership is 70 years (65 years at present) for life insurance, and expand the product offer, under certain conditions, to people who are not in paid employment at the time of purchase. “It is not trivial to increase the age of 5 years and to expand the part-time worker, said Mr. Rochon. Before, all the risk selection system, which was based on the fact that people are working full-time. “

Regional Vice president sales, Quebec Center, Canada protection Plan (CPP), Alain Plante stresses that with the products at issue simplified, it is far from the books of rates, which are still being used 20 years ago. This evolution has allowed to push the boundaries of acceptance,-he said during the world Day of the financial health, organised by the Council of professionals in financial services (CDPSF), and in which the Log of the insurance attended.

“The insurance program simplified has imposed a new way of doing business : pricing non-medical. It lies only in the issues, said Mr. Plant. You answer yes and you are directed to a product that is more restrictive. You answer no and you have a product with better conditions. ”

Insurance regardless of the conditions

Since its founding in 1992 by David Slabodkin, PPC has accumulated statistics that allow it to provide insurance coverage “regardless of the conditions,” said Mr. Plant. “The doctor will say to a person diagnosed with a metastatic cancer that it has a life expectancy ranging from six months to two years. Impossible for these people to have a traditional insurance, ” said Mr. Plant.

The data accumulated by PPC allows them to have a different perspective. “Our statistics tell us that many of these people will live more than two years. We have a product designed in function of this reality : Life Insurance Guaranteed Acceptance, coverage of which is deferred. Limited to $ 25,000 of life insurance, the insurer will only pay if the death occurs after 24 months after the establishment of the police force, ” said Mr. Plant.

Concrete cases

In the case of a person who was diagnosed 13 years ago and is in remission for the past 11 years, the possibilities open to a product in the best conditions, ” he adds. “We will ask if the person has suffered cancer in the past 10 years. In this case, the person was able to obtain a Life Insurance Elite Simplified. “

The insurance coverage of this product is immediately payable in the event of death. It offers the best price. “A person who has had cancer, non-aggressive and is considered to be in remission for 5 years can get up to $ 500,000 of life insurance cover immediately. “

Mr. Plant added that a person in remission for three years can receive up to $ 350,000 insurance with a coverage deferred for only one year, and a coverage of 50 % of the capital during the second year.

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