RGA paper shows underwriting gains when adding Medical Data to Prescription Data

In their study, “What do we gain in underwriting by accessing medical claims data in addition to pharmacy prescriptions?” RGA reports the results of using Irix® Prescription Data and Medical Data, compared to Prescription Data only, in the context of both the Rules Engine and Risk Score. The reinsurer’s findings can help you decide which tool is right for you and what you should do to get the most benefit from your choice.

The authors concluded that:

• When using the Rules Engine with a previously established Rx-only ruleset, adding Medical Data to Prescription Data shifted risk classification to a higher class, resulting in more declines, with an improvement in mortality.
• Adding Medical Data to Risk Score produced a more widely spread distribution of scores, including an increase in best-class offerings with reduced mortality, suggesting greater overall risk segmentation.
• If the goal is to identify high risks to make appropriate decline decisions, the Rules Engine and Risk Score yield similar results.

RGA reports, “The obvious advantage of Irix rules is transparency, and it is helpful in understanding the reasons and sources of the incremental value when Dx is added to Rx data.”

The reinsurer found that adding Medical Data to Risk Score increased the number of applicants eligible for the best class, while it resulted in fewer best-class offers when using the Rules Engine with the original (Prescription Data-only) ruleset.

RGA’s results corroborate our assertion that carriers who adjust guidelines and recalibrate rulesets when adding Medical Data reap its maximum benefit: harnessing new protective value while maintaining issue rates.