The insurance industry has been adopting more digital processes since the beginning of the COVID-19 pandemic in 2020.blackdovfx/iStockPhoto / Getty Images
Manulife Financial’s new electronic life insurance application and accompanying artificial intelligence tool will reduce administrative headaches for advisors while addressing client complaints about a lengthy approval process.
Manulife removed around 40 per cent of questions on the application, opting for a more personalized approach, to speed up the insurance application process, says Karen Cutler, Manulife’s chief underwriter for individual insurance Canada, in Waterloo, Ont.
“Expediting the application will provide advisors more time to provide additional advice and connect with more clients,” she says.
The insurance industry has been adapting since the beginning of the COVID-19 pandemic in 2020, when underwriters discovered they could assess many applications without medical exams and fluid testing. Insurers have since experimented with asking applicants fewer questions.
Manulife’s streamlined process responds to clients’ different expectations today, Ms. Cutler says. “They don’t understand why our processes take so long.”
While the insurer still collects all the needed medical information, the change is in how the questions are asked. Ms. Cutler says the new personalized questions focus on the four big health impairments insurers usually see in clients – heart disease, cancer, stroke and diabetes.
From there, the questions drill down on medication and treatment to understand other ailments clients may be facing, she says. Clients are asked to provide specifics of why they’re taking a particular medication.
Ms. Cutler says the application also has an area for clients to provide more open-ended medical information.
She says before launching the new application, Manulife analyzed several hundred applications, doing a side-by-side comparison of the longer and shorter approaches to questioning.
“We found we were not creating any gaps in the information that was coming to us,” Ms. Cutler says.
She estimates the new application process is around 15 minutes faster, as the advisor is no longer focused on a long, general list of impairments and conditions.
The new application works with an enhanced version of Manulife’s AI tool, MAUDE, to underwrite younger and healthier clients, depending on the product type and coverage amount.
“Someone with no critical or chronic illnesses or medication could be approved in as little as two minutes after submitting the application,” she says.
The new application launched last fall, and by December, 58 per cent of eligible applications were approved automatically, she says.
Some cases that aren’t approved automatically will go to an underwriter for review.
“Those cases can still come out standard as well,” she notes. “It just means the model was unable to assess the risk.”
Editor’s note: An earlier version of this article stated that advisors could use Manulife’s new AI tool, MAUDE, to underwrite younger and healthier clients, depending on the product type and coverage amount. MAUDE has been enhanced but it’s been around since 2018, and it’s used by Manulife underwriters, not advisors.