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Can AI Democratize Life Insurance? Posted on : Feb 11 - 2019

The United States is seriously under-insured. Forty percent of the populace has no life insurance, and among those who have it, one out of five say they don’t have enough.

Why should one care? If you die without life insurance you leave others to pay your debts. If you head a family, you put your spouse and children at risk.

The gap persists partly because fully underwritten life insurance is difficult to purchase. It typically requires a mini physical that includes the drawing of fluids (e.g., blood and urine). Underwriters, for their part, often avoid applicants with serious diseases like cancer because those cases require an arduous — and expensive — medical assessment process.

Several new startups, however, are using AI (artificial intelligence) to address these problems. In the process, they just may democratize life insurance.

In July, Haven Life, a Massachusetts Mutual subsidiary, announced that it was expanding its fully underwritten term life insurance policy to non-U.S. citizens and individuals with chronic illnesses. Haven Life use artificial intelligence to match applicants with plan options with face amounts up to $3 million. A process that had taken a month(s) now takes 12 days or less. (Policies can be issued in minutes for lower face amounts.)

Atidot, a Tel Aviv-based InsurTech startup, is using artificial intelligence, machine learning (ML), and predictive analytics to help life insurance companies optimize their books of business. Recently, it assisted a top-10 U.S. life insurer in identifying underinsured policy-holders to the tune $1 billion.

AI and machine learning can have an “exponential impact” on the life insurance industry, says Atidot CEO Dror Katzav. In the past, carriers may have utilized a handful of predictor variables to identify insurance prospects, e.g., age, gender, smoking, etc. His firm uses 500-600 variables. View More