Absa Life in South Africa is offering 700,000 qualifying Absa Bank clients automatic life insurance without the inconvenience of filling in a lengthy questionnaire or going for a medical check-up.
How is this possible?
Absa Life, part of the Barclays Group, has used “big data technology” to pre-qualify 700 000 bank clients for life cover. Jannie Venter, the managing executive at Absa Life, says that they have eliminated the need for traditional underwriting preferring to pre-qualify clients with its predictive underwriting solution, called Affinity.
Interestingly the conditions are:
- A previous death, disability or critical illness policy must not have been issued subject to exclusions or premium loadings;
- You must not have suffered from, or have, the following conditions: heart attack, stroke, diabetes, cancer or Aids; and
- You must not have tested positive for HIV.
- Failure to qualify results in the traditional underwriting.
The big data allowed Absa Life to develop an algorithm based on banking behaviour that predicts whether a client will qualify for its life cover. For example, if someone has an income then they are healthy enough to work. It looked for correlations between the risk and claims profiles of its 4.5 million insurance clients and the transaction patterns of Absa Bank clients. Based on what it found, it extracted certain factors, which were used to create the algorithm.
Is Affinity the first predictive underwriting solution in the world?