In Australia, Zurich has concluded the first phase of its plan to develop AI systems to streamline life insurance applications.
The plan is for the firm to make immediate underwriting decisions on applications that disclose mental health issues, without the need for a doctor’s report, which previously would take as long as 22 days.
Jacqui Lennon, Head of Retail Zurich Australia & New Zealand, says its AI models, which draw on anonymised data from seven years of past applications, identified factors correlated to a mental health exclusion being placed on an applicant, including:
- Lack of participation in sports, pastimes or recreational activity
- Occurrence of any ongoing health issues beyond mental health, such as chronic pain, cancer or heart disease
- Time spent in hospital or having medical treatment during the past five years; and
- Having biological parents or siblings with a health condition, such as diabetes, cancer or heart disease
Currently, around one quarter of the life insurance applications Zurich receives include a disclosure for a mental health condition.
In 2023, mental health was the third most common cause for claim at Zurich, accounting for 20% of all claims and resulting in AU$255m (NZ$276m) in claims payments.
For some of the firm’s retail life insurance products, mental health becomes the first or second most common reason for claim, accounting for up to 35% of claims in some cases.
John Kim, Chief Data Officer Zurich Australia & New Zealand, says using AI allows the firm to analyse thousands of data points, which would not be possible for a human to do.
Nevertheless, the AI models will be used to verify decisions made by Zurich’s underwriting team and the existing rules they use, in keeping with Zurich’s AI philosophy to ‘always keep a human in the loop’.