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Facial analytics to transform life insurance

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C-suite discussion: pictured on the panel at yesterday's BILTIR conference at the Fairmont Southampton are, from left, PwC managing director Colm Holman, Patrick Kelleher of Weisshorn Re, Chip Gillis of Athene Life Re and Legal & General Reinsurance’s Manfred Maske (Photograph by Akil Simmons)

A hi-tech way to assess people’s life insurance risk is set to revolutionise the industry, an expert predicted yesterday.

And he said underwriting based on a selfie taken on a smart phone, coupled with a short questionnaire, would be more effective than current techniques for risk assessment.

Professor S Jay Olshansky added that new techniques were faster and more accurate — and led to more realistic premiums, lower costs overall for clients and in turn a better bottom line for insurance firms.

Prof Olshansky, professor of epidemiology at the University of Illinois, Chicago, said: “There are people in the field who now believe that we are three to five years away from developing techniques that will more accurately allow us to predict how long people will live and how healthy they will be.

“The technique is available today — and it alters the way insurance underwriting is likely to be carried out in the future.”

Prof Olshansky was speaking after he delivered a keynote address at the Bermuda International Long Term Insurers and Reinsurers Association (BILTIR) conference, held yesterday at the Fairmont Southampton.

He explained: “Underwriting today generally takes anything from two weeks to a month — it’s based on blood chemistry, answers to some basic questions and a basic evaluation based on birth date and gender.”

But he added: “Much of the data currently being used to assess survival is not reliable.

“There are a number of questions — biodemographic — that are much more predictive about future health and longevity, cemented with facial analytics, a photograph of your face, that reveals behavioural risk factors and propensity for a long life which is revealed in the face.”

Prof Olshansky said: “It’s a cutting-edge technique which we think will revolutionise the entire life industry. It takes ten minutes against two to four weeks.”

He added: “It should dramatically reduce the cost of insurance because it can be done quickly and inexpensively with no blood chemistry.

“It will draw in new insurance clients, individuals who want and need insurance, but don’t want invasive procedures which we argue are no longer needed.”

Prof Olshansky said that young people in particular would find an online-based assessment more attractive and user friendly, which would lead to higher take-up rates.

He added: “People can go online, answer questions, upload a photograph and be insured instantly instead of in weeks.” Prof Olshansky also told nearly 200 delegates at the daylong conference that major increases in life expectancy could not be expected “any time soon”.

He said afterwards that science had taken “a disease-specific approach” to tackle “the things that creep up on us as we get older”.

But he added that an approach based on the science of ageing itself offered a better chance of people living longer lives.

Prof Olshansky said: “It’s about the things that will have multiple effects on multiple diseases all at once.

“There are limits to how long we can live — but ageing science is improving rapidly and we are on the verge of a breakthrough.”

He explained that studies of centenarians and supercentenarians and their children offered the chance to identify genes that slowed the ageing process.

And he said: “Researchers in that field are trying to find a way to give that advantage to the rest of the population.

“Another way is to test drugs and compounds which slow the biological effects of ageing. It would have a systemic effect on all disease at once.”

Andrew Smith, a leader of the insurance industry team at professional services firm E&Y, who led a discussion on the new European Solvency II regulations, with which Bermuda is currently seeking equivalence, and the “economic balance sheet” of Bermuda.

He added that it was “looking very positive” that the European Commission and Parliament would grant Bermuda access to European markets on a level playing field with Europe-based businesses.

The meeting ended with a top-level panel discussion of reinsurance CEOs, moderated by PwC managing director Colm Holman and featuring Patrick Kelleher of Weisshorn Re, Chip Gillis of Athene Life Re and Legal & General Reinsurance’s Manfred Maske.

Mr Kelleher said: “Over the next few years, a shift in demographics will see a growth in the demand for retirement products.”

And he added the retirement income slice of the life insurance market would increase in importance.

Mr Gillis added he did not see opportunities for Bermuda businesses in the US falling away, while there was “tremendous opportunity” for growth in Europe and Asia.

And he said: “These are three very substantial markets that can be served by Bermuda. The professional know-how in Bermuda will serve these markets very well.”

Conference speakers: Professor S Jay Olshansky, left, and EY’s Andrew Smith