The reinsurer delivers strong retrospective evidence that EHR is valuable as an additional—not alternative—data source with impressive mortality and cost savings potential.
Although Munich RE’s study was not specifically a test of Irix EHR, this white paper validates our position that using EHR data in conjunction with prescription histories and medical claims data is a practical and cost-effective approach to risk assessment in life insurance underwriting.
Munich Re conducted a retro study (“EHR retro study: Non-fluid/accelerated underwriting”) to determine the protective and operational value of adding electronic health records (EHR) in accelerated underwriting (AUW) use cases. The methodology assumes that prescription and medical data are key drivers of a successful AUW program. The use of EHR in conjunction with prescription and/or medical data suggests that the results are likely representative of our EHR solution.
Considering that the average mortality savings across all cases was nearly $1,000 per policy, Irix EHR appears well positioned to deliver considerable value.
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Data-stacking methodology: The study methodology aligns with our belief that claims-driven EHR data acquisition is ideal. The study reexamined 525 applications for life insurance representing multiple carriers and a variety of distribution channels.First, underwriters placed each applicant in a risk class based on application data, prescription and/or medical data, and MIB data. Then, each applicant was reevaluated with the benefit of EHR. When making their second evaluations, underwriters treated EHR as an additional—not an alternative—data source. By using EHR data in conjunction with prescription and/or medical data, the underwriters based their decisions on the same types of data made available to our EHR customers.
- Better mortality savings: The study authors estimated mortality savings based on the rate classes to which applicants were assigned before and after underwriters had access to EHR data. They found that decision changes from information in the EHRs resulted in 35% higher estimated overall mortality.
- Considerable cost savings: The cost-benefit analysis showed that mortality saving worked out to $971 for the average policy. Net savings varied significantly by issue age and face amount. Unsurprisingly, savings were greatest in the buckets associated with older issue ages and larger face amounts.
“This demonstrates clear net positive protective value.” – Munich RE
- Increased decisioning: Munich RE also measured the operational value of adding EHR by comparing decision rates with and without EHR. The authors note that in some cases, adding EHR resulted in underwriters being able to make a decision with the available information (i.e., without seeking additional lab tests or ordering an APS), while in other cases, EHR raised issues that required further investigation.
On balance, adding EHR increased underwriters’ ability to reach a decision from 68% of cases to 79% of cases.“Incorporating EHRs at the point of sale can reduce kick-out or refer-to-underwriter cases, improving instant decision or light touch rates.” – Munich RE
- Important condition identification Munich RE found that adding EHR into the underwriting workflow resulted in changed decisions about 12% of the time. The conditions responsible for changes to underwriters’ original risk-class decisions included several that keep underwriters up at night, including:
- Changes to build or bodyweight
- Cardiovascular conditions
- Diabetes
- Cancer
- Substance use
- Tobacco use
- Mental health or nervous system disorders
“Whether it is tobacco use, build, or medical history, our findings indicate EHRs can be a quick and informative tool for confirming disclosures or uncovering discrepancies with meaningful mortality impacts.” – Munich RE
EHR data gives additional—not replacement—risk assessment value
This research further validates our commitment to claims-driven EHR acquisition, which delivers EHR data in the context of Prescription Data and/or Medical Data. While it is true that adding EHR into decision-making increased the number of applicants declined or rated, it should be noted that adding EHR also allowed underwriters to identify some instances of reverse misclassification, suggesting that Irix EHR will help carriers insure the maximum number of people at the best sustainable rate.
Irix EHR gives underwriters progressive options for mortality risk assessment beginning with Irix Prescription Data and Medical Data interpreted by the Irix Rules Engine, layering in EHR when needed and available, and providing useful direction when it comes to ordering APSs if necessary. All this is seamlessly and transparently accomplished in the context of familiar and established workflows.
Read the full white paper here.
