The insurance industry has only begun its foray into AI, and companies are already experimenting with new ways to incorporate it into their day-to-day operations in anticipation of further technological development.

“It’s the very early days of AI,” Breen said. “For menial, repetitive tasks, we put the computer on it … but we’re a ways away from a computer underwriter. We’re really just augmenting humans at this point.”

That’s still a significant change in the industry, he said. Underwriters at Argo Digital are now beginning to manage portfolios, rather than review every single submission. The more standard, predictable claims are handled by machine learning algorithms, Breen said, and the human underwriter is essentially fine-tuning the entire process and intervening in cases that need higher-order decision-making.

Pogreb sees even more potential for streamlining the underwriting process. She expects that the number of applications a human underwriter will be required to handle will significantly drop as machine learning makes even more of a foray into the insurance industry.

“We believe with technology and machine learning, a lot of [human underwriting] can be done away with,” Pogreb said. “The percentage of insurance applications that require human touch will go down dramatically, maybe 80 to 90 percent, and even to low single digits.”

While adoption of AI has come in rudimentary ways, it’s already drastically changing the lay of the land. Insurance companies that want to stay competitive should begin testing the waters of AI, Wolanow said.

“Companies can prepare and stay competitive by starting to assess the impact of machine learning on their business by prototyping their own algorithms,” Wolanow said. “An individual machine learning algorithm that performs its analysis on a stand-alone basis is actually quite inexpensive, [and] in many cases, a stand-alone analysis tool is more than fit for purpose.”

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The distribution chain in the insurance industry is winding and complex. A series of middlemen examine information between the insured and the carrier, leading to a lot of human error and manual work that slows the process, said Breen. However, AI is already starting to fix that problem.

Algorithms can reduce the time and number of errors as information is passed from one source to the next. By logging into a portal and uploading a PDF, the amount of data entry and re-entry is reduced and accuracy is increased, Breen said.

“People get tired and bored and make mistakes, but algorithms don’t,” he added.

For Pogreb, bridging the gap between the insured and the insurer is as important as reducing error. With better data, both customers and insurers benefit, she said, because insurers can develop better products based on more accurate assessments, and customers will pay for exactly what they need.

“With machine learning, I think we’ll be able to do a much better job giving the consumer that advice automatically,” Pogreb said. “Based on what you tell me about your business and what I know about similar ones, [I can say] I believe this is the right combination of coverage for you. So it’s putting the onus neither on the agent nor on the customer – who frankly doesn’t have the experience or knowledge – but letting the data provide the advice.“

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Historically, insurance underwriters have relied on information provided on applications to assess the risks surrounding a potential client. The trouble, of course, is that applicants could be dishonest or make mistakes, rendering these risk assessments inaccurate.

Machine learning, specifically natural language understanding (NLU), enables insurers to pore through more abstract sources of information, such as Yelp reviews, social media postings, SEC filings and so on, and pull pertinent information together to more adequately assess the insurance carrier’s potential exposure.

Reference

It is estimated that the risk of a male being diagnosed with prostate cancer by his 85th birthday will be 1 in 7. Reference

One in eight women will develop breast cancer in their lifetime. Reference

Over 47,000 Heart Attacks occur in Australia every year.  More than 60% of cancer patients survive more than five years after diagnosis. Reference

Over 90% of all life insurance claims in 2016 were accepted by life insurance companies, according to a joint research project by the Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC). Reference

In 2016, 8500 people were hospitalised and nine died from asthma attacks after thunderstorms tore across Melbourne. Reference

It’s nearly always better to get a life insurance policy before you get pregnant to avoid potential price hikes brought on by temporary conditions during pregnancy. Reference

1 in 2 for both men and women, will be diagnosed with cancer before the age of 85. Reference

Despite the gains of life insurance take out amongst younger people, many Aussies do not fully understand the benefits of life-related insurances or aren’t taking the next step to get the full amount of protection they need. Reference

Thanks to new technology, selfies might eventually be added to the list of data sources for insurers to draw on. The product, called Chronos, uses facial analytics and other data to determine life expectancy. Reference

Royal Australian College of General Practitioners President Bastian Seidel told the committee mental health is now the most prevalent condition in Australia, overtaking cardiovascular disease and, more recently, dementia. Reference

Like most things related to the financial planning arena, insurance can seem complicated and overwhelming at first. Seek some help from a professional you trust and don’t be afraid to ask questions. This is a big purchase and something that could seriously impact your loved ones down the road. Reference

Too many people rely on their employer-sponsored life insurance. This is the number one mistake. Why? Many people can’t take their life insurance policy with them if they quit or get fired from their job.  Reference

There are many options for structuring the ownership of the Life Insurance and Income protection cover, you may be able to claim the cost as a tax deduction, this requires a professional Financial Planner to assist you with the most tax effective structure.  Reference

Life insurers must change their thinking on mental health as treatments advance, a doctor has told a parliamentary joint committee hearing on the industry.

Royal Australian College of General Practitioners President Bastian Seidel told the committee mental health is now the most prevalent condition in Australia, overtaking cardiovascular disease and, more recently, dementia.

“So, of course, I’m not surprised there are quite significant claims based on mental health conditions,” he said.

“I also would like the insurance industry to be a bit more sophisticated in their thinking.

“Just because you have a diagnosis of a medical condition, it doesn’t mean your prognosis is poor. Science and medicine advance.”

He says 50 years ago a heart condition was seen as a death sentence, but now life expectancy is almost the same as in a healthy person.

“I have patients who’ve been diagnosed with bipolar disorder,” he said.

“I would say 30 years ago the prognosis of bipolar disorder probably wasn’t as good as it is now, but we have more modern medication available, better support networks, [and] we have psychologists out there.”

Because such patients see their doctors on a more regular basis, other medical issues are picked up and treated.

“[If a person was] to be penalised because of a diagnosis of bipolar disorder, this would be entirely inappropriate, because we know their life expectancy is probably much better compared to what we expected when they were first diagnosed decades ago.”

Dr Seidel says insurers must consider advances in care and treatment.

“We are inviting the insurance company to ask for that particular context, to take it into consideration and to ask for knowledge, and the knowledge should be provided by the treating doctor, and it should not just be a line on a piece of paper that’s a diagnosis.

“Patients with depression function perfectly well when they are supported with access to treatment and support.”

Reference

Most people wouldn’t dream of driving without car insurance, or living in a house without home and contents insurance, so it is remarkable that the majority of Australians do not think about protecting their families through life insurance, in the event of death, accident or illness. 

 

With the incidence of cancer increasing year on year and the occurrence of cardiovascular diseases preventing many families from living a full life due to disability, it is becoming increasingly important to consider crisis cover as part of a life insurance portfolio. Many Australian families struggle, both emotionally and financially, when someone in their family is diagnosed with a life threatening or debilitating health condition. By taking out crisis cover, you can help ease the financial burden should you be unfortunate enough to suffer a traumatic event. You might think ‘it’ll never happen to me’, but you may think again after considering these facts. 

 

In Australia, cancer has been the leading cause of death in Australia over the past six years, with more than 39,000 people estimated to die from it each year. 1 in 2 men, and 1 in 3 women, will be diagnosed with cancer before the age of 85. 

 

Amongst the most common cancers in Australia are cancer of the digestive organs, breast cancer, skin cancer, lung cancer and prostate cancer. 

 

Almost 3,000 men die each year of prostate cancer and around 18,700 new cases are diagnosed every year. Each day about 32 men learn news that they have prostate cancer – tragically one man every three hours will lose his battle against this insidious disease. 

 

More than 2,640 women will die from breast cancer in a single year – that’s over 7 women each day. 1 in 8 women will be diagnosed with breast cancer by the age of 85. 

 

Over 380,000 Australians are treated for skin cancer each year – that’s over 1,000 people every day. Over 1,600 Australians die from skin cancer each year. Australia has the highest rate of skin cancer in the world. Skin cancers account for around 80% of all new cancers diagnosed each year in Australia. Each year Australians are four times more likely to develop a common skin cancer than any other form of cancer. 

Cardiovascular disease (CVD) is the term used for heart, stroke and blood vessel diseases. CVD kills 1 Australian every 10 minutes and prevents 1.4 million people from living a full life because of disability caused by the disease. CVD is one of Australia’s largest health problems. Despite improvements over the last few decades, the health and economic burden of CVD exceeds that of any other disease.

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According to a nationwide independent study, over a third of respondents, if they had a life insurance policy, didn’t know what kind of policy they had. And though 70% felt confident that their insurance companies would pay out if the need arose, only 34% felt sure that they would know how to collect a payout.

Do you fall into this confused category? If so, it’s crucial to educate yourself about life insurance, especially if you have people who depend on you (like kids), or have a mortgage or significant amount of debt.

1. I Wish I’d Gotten Life Insurance Before I Got Pregnant

I knew that having our first child meant that getting life insurance should be a top priority for both me and my husband. We researched policies, got a quote for an affordable term life insurance policy and had our medical exams. Imagine my surprise when, a few weeks later, the agent called me back and told me my new “adjusted” rate.

The cost of my policy had gone from a reasonable monthly fee they’d quoted me—to nearly four times that amount. The reason, he said, was that my cholesterol levels were high. I called my doctor in a panic. “Cholesterol levels always spike during pregnancy,” she reassured me, “and they probably won’t be back to normal until a few months after you give birth.”

After doing some research, I found that it’s nearly always better to get a life insurance policy before you get pregnant to avoid potential price hikes brought on by temporary conditions during pregnancy. While some companies will account for the fact that you gained weight due to the pregnancy, factors like higher blood pressure or postpartum depression can also affect your ability to get the best rates.

Now my daughter is three months old, and I’m still waiting for my numbers to dip before starting again. I really wish I’d known to start this process when trying to conceive instead.

2. I Wanted to Put Off Getting Life Insurance—But My Husband Didn’t

When I married James* in 1978, I was 21 years old. I never could have imagined then that I’d be a widow by 26, or that I’d have a 9-month-old baby to take care of on my own.

As soon as we became pregnant, James started talking about life insurance—but I was hesitant. I was 24, but James was already thinking like an adult. It’s not that I wasn’t an adult; the topic of life insurance was just scary. I was pregnant with our yet-to-be-born child, and the last thing I wanted to think about was one of us dying.

James passed away on a Tuesday in March. The weekend before, we’d had an especially good time together. That Monday evening, my neighbour came over to watch a show. James sat with us but left early and was already asleep when I joined him later.

The next morning, he left for work without me seeing him. Whether he kissed me goodbye while I slept, I’ll never know. I had a hair appointment with the woman across the street. I was sitting in a chair in her basement when I heard footsteps coming down the stairs. I turned to see my brother, Paul, who, like James, was a construction worker. He looked at me and said, “Cathy, we have to go.”

I remember him pulling me out of the chair, and driving to the hospital. My first words were, “How bad?”He just squeezed my hand. When we arrived at the ER, the other construction workers were there. It was hard for them to look at me—and that’s when I knew.

My story is a reminder that once you have a family—no matter your age—life insurance is absolutely essential.

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Last year, 8500 people were hospitalised and nine died from asthma attacks after thunderstorms tore across Melbourne.

 

But why did this happen?

The pollen season occurs from early October to late December, as hay fever sufferers will tell you.

For a thunderstorm asthma event to occur, the perfect blend of conditions must be met: high pollen count in the air, humidity and a northerly wind.

When a thunderstorm strikes — one that’s just right — pollen grains absorb moisture and explode into tiny particles.

Storm winds scatter the particles in the air, sweeping them across long distances, where they can easily be inhaled deep into the lungs.

For asthma sufferers, this fires up an attack. But it also means people who haven’t been diagnosed with asthma can be a victim.

St John Ambulance Victoria chief executive Gordon Botwright said attacks could strike quickly.

“Thunderstorm asthma is a particular threat for those who already suffer from hay fever or asthma, but during the 2016 storms, 40 per cent of people who were struck by thunderstorm asthma were not diagnosed asthmatics,” Mr Botwright said.

“It’s important to recognise when simple hayfever symptoms turn in to an asthma emergency.”

If you sneeze and wheeze during spring, speak to a doctor or pharmacist to prepare a plan of action.

In the meantime, stay inside with the windows and doors shut when there’s a spring thunderstorm.

People experiencing symptoms are advised to take four puffs of an inhaler, wait four minutes, take another four breaths, and if necessary, have another four puffs before dialling 000.

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Insurers say they’re ready to contribute to a royal commission into alleged misconduct by banks and other financial services entities.
“Though the calls for a formal inquiry have focused on the banks, the Insurance Council of Australia hopes the royal commission will end political uncertainty and improve public confidence in the insurance sector,” CEO Rob Whelan said.
“The Insurance Council is reviewing the draft terms of reference and will provide input to the Government.”
As reported in a Breaking News bulletin last week, the royal commission will consider the conduct of banks, insurers, financial services providers and superannuation funds, excluding self-managed funds.
“The Government has decided to establish this royal commission to further ensure our financial system is working efficiently and effectively,” Prime Minister Malcolm Turnbull said.
“Instead of the inquisition into capitalism that some have called for, the royal commission will take a conventional, focused approach.”
Draft terms of reference include how well equipped regulators are to identify and address misconduct, forms of industry self-regulation and whether practices and behaviours meet community standards and expectations.
“The commission should give priority to matters that, in its opinion, have greater potential for harm if not addressed expeditiously,” the draft says.
The Government, which is yet to appoint a former or serving judicial officer to lead the inquiry, says the review will be given a year to deliver its final report.
IAG CEO Peter Harmer says the financial services industry plays an important role in the lives of Australians.
“We understand the level of concern around culture and conduct,” he said. “We support the action the Government is now taking to rebuild trust and confidence in the sector through the royal commission.”

Reference

Over 90% of all life insurance claims in 2016 were accepted by life insurance companies, according to a joint research project by the Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC).

In 2016 there were 103,100 claims finalized, of which 95,000 or 92.1% were accepted and 8,100 or 7.9% were declined by life insurers. There were a further 23,200 claims which were either withdrawn or undetermined at the end of 2016. Disputed claims of 4,400 represented only 3.5% of all reported claims in 2016.

A total of 16 insurers provided information to APRA and ASIC regarding Term Life, TPD, Trauma and income protection claims.

ASIC Deputy Chair, Peter Kell, commented that these results were consistent with an earlier report conducted by ASIC which showed “that over 90% of life insurance claims are paid in the first instance by insurers”.

APRA noted in the paper that, while further work needed to be done to increase reliability and comparability of this data at a company level, “publication of aggregate level data is an important step towards achieving the objectives of this initiative, and will materially enhance transparency and inform public debate.”

Further information about this report can be found at either the APRA website or the ASIC website.