Automated underwriting in China is expected to grow substantially following the announcement of new regulations affecting personal lines insurance products sold online coming into force in 2022.
With automated underwriting, it is now much easier and simpler for insurers to take on health insurance applicants with pre-existing conditions.
The China Banking and Insurance Regulatory Commission (CBIRC) has issued new rules to strengthen and improve the supervision of personal insurance business, prevent operational risks, promote fair competition, and to protect the rights and interests of consumers. The new regulations apply to personal lines insurance products sold on the internet, including accident insurance, health insurance, life insurance, and annuity insurance.
As well as tightening the rules around how insurers transact business online, the CBIRC is strongly encouraging insurers to use automated underwriting systems instead of manual systems, and to use technologies to enhance underwriting quality and efficiency, improve anti-fraud capabilities, and to bring more innovation to the underwriting processes.
This is not the first time the CBIRC has pushed for greater fairness and more appropriate insurance products that meet the needs of consumers. Earlier in the year, the CBIRC issued recommendations to life and health insurers on meeting consumer’s health protection needs, with a focus on improving the level of protection for the elderly with pre-existing conditions and children.
Verisk’s Life, Health, and Travel business has over 20 years’ experience in automating underwriting with a strong track record of helping global insurers automate the assessment of pre-existing medical conditions.
Among health insurers, there is often limited appetite to provide cover for individual applicants with pre-existing conditions and a lack of tools available to analyse the risk in detail of each customer.
With the advent of automated underwriting, it is now much easier and simpler for insurers to take on health insurance applicants with pre-existing conditions would have otherwise been excluded.
Verisk’s Health Risk Rating Tool is an automated medical risk assessment solution with a self-declaration process for customers, providing insurers with almost immediate cover decisions and risk scores based on their total medical exposure, including the costs of maintaining a chronic medical condition and any potential complications of a condition and subsequent costs.
With increasing competition and regulatory pressure for health insurance providers in China, it’s a perfect time to explore automated solutions to replace inefficient and lengthy underwriting processes while opening up your book of business to a wider audience.