Find Hidden Risks by Linking Medical and Nonmedical Data

August 2024

In many cases, when life insurance applicants have certain medical conditions, they are automatically triaged for manual review.

But in doing so, are carriers missing opportunities to better segment populations that are considered high risk? And in turn, are they overlooking good candidates for accelerated underwriting — and glossing over those that warrant closer scrutiny during manual review?

New Research

The 2024 LexisNexis Risk Solutions Insurance Mortality Risk Management Study reveals that by simultaneously analyzing electronic medical data and nonmedical data, such as public records, driving history and credit, carriers can better segment applicants and discover previously hidden opportunities.

The study population included 50 million de-identified lives, aged 18 to 89. The study included over 1.7 billion medical claim lines and LexisNexis Risk Classifier Scores, which distill nonmedical attributes from public records, driving history and credit into one numeric score.

Notably, medical and nonmedical data are commonly used in life underwriting workflows. However, they are typically considered separately. The study shows that by combining these two data sets carriers can not only unveil previously hidden insights but also quantify the heightened mortality risk identified by their combination.

Example 1

Combining alcohol abuse diagnosis and DUI violation

For example, consider alcohol use and how a life insurance carrier might derive insights from medical data (diagnosis of alcohol abuse) and nonmedical data (DUI in the past three years). Using standardized mortality ratio (SMR), we can normalize mortality for gender, age and smoking. SMR allows us to compare mortality risk across various conditions and populations — and quantify the increase or decrease in mortality compared to the general population.

Table 1. Combining risky driving behavior with medical diagnosis of alcohol abuse can reveal higher risk.

Source: 2024 LexisNexis Risk Solutions Insurance Mortality Risk Management Study

Table 1 shows that with neither a DUI nor a diagnosis of alcohol abuse an applicant has average mortality risk. Having either a DUI or a diagnosis of alcohol abuse means two to three times the mortality risk.

However, applicants with a recent DUI and a diagnosis of alcohol abuse have more than five times the mortality risk of the general population. And this finding is only revealed when we consider electronic medical and nonmedical data at the same time.

Example 2

Segmenting applicants with type 2 diabetes

We’ve just seen that combining risky driving behavior with a medical diagnosis of alcohol abuse can reveal higher risk. Next, let’s see how simultaneously analyzing medical and nonmedical data can help carriers segment populations and make more informed underwriting decisions.

Consider type 2 diabetes. Within our study population, 10 percent have type 2 diabetes — and with an SMR of 157 percent, this is considered a higher-risk condition that is typically not selected for accelerated underwriting.

We begin with the 10 percent of the study population that has type 2 diabetes. With LexisNexis Risk Classifier, we combine that medical data with driving history and credit into a numeric risk score.

With this combination of medical and nonmedical data, we are able to segment the population with type 2 diabetes into 10 deciles of risk. Decile one has the highest risk mortality and decile 10 the lowest.

Immediately, we can see the opportunities and risks that were previously obscured.

• Individuals in decile 10 have average mortality, with an SMR of 104 percent. They could be good candidates for accelerated underwriting.
• Roughly 30 percent of the type 2 diabetes population — those in deciles one, two and three — have an SMR that’s twice or more the average mortality risk. These applicants might not be managing their diabetes as well as their peers and could warrant closer scrutiny in manual underwriting.

Traditionally, a carrier would have triaged all applicants with type 2 diabetes for manual review. But by combining medical and nonmedical data, it’s possible to segment the population, make more informed decisions and take more appropriate action.

When 1+1 Is More Than 2

Many life insurance carriers are driving accelerated underwriting programs to make faster risk decisions and improve the customer experience, and the vast majority are leveraging medical and nonmedical data in their underwriting workflows.

But most carriers are looking at medical and nonmedical data separately. And that means they’re missing a combined view of applicants that enables more informed decision-making, mitigates mortality slippage and advances accelerated underwriting programs.

Type 2 diabetes is just one of the medical conditions we analyzed in the 2024 LexisNexis Risk Solutions Insurance Mortality Risk Management Study. Download the full report to learn how you can combine medical and nonmedical data to improve outcomes for consumers and your bottom line.

About LexisNexis Risk Solutions

At LexisNexis Risk Solutions, we are passionate about using the power of data and advanced analytics to help life insurers make better, timelier decisions in a world of hidden risks and opportunities. This is why we make it our mission to provide essential insights to advance and protect people, industry and society. Our life insurance solutions can help reduce the time it takes to obtain critical information from days and weeks to seconds and hours. Gain valuable insight for knowing your prospects and customers through every step of the policy life cycle with unique data and advanced scoring analytics while upholding the highest standards of security and privacy. https://risk.lexisnexis.com/insurance/life-insurance-solutions