While some life underwriting functions can be handed over to “robots”, humans will never be replaced in the process, according to AIA Australia Chief Underwriter Andrew McPherson.

“The life industry is always looking at ways to underwrite more efficiently and cheaply,” he told the Financial Services Council conference on the Gold Coast last week.

“Do we look at robots to bring in data, to feed into the underwriting engines?”

He says the amount of data being collected by computers is rising, and insurers know more about their clients than in the past.

“We also have the potential to import data from other sources, such as credit card bills, to build a picture of the client. This will result in our products changing to suit the data.”

Mr McPherson says data will produce modelling of demographics and even locations, so insurers can create products to suit particular groups.

“We can… customise a product to make it just what a particular consumer wants.

“We are seeing Google and Apple working on uplifting data direct from general practitioners’ records. Hopefully we can get a direct feed from the practitioner’s file.”

Mr McPherson says life insurers must be careful how they use data.

“We will need to ask if we should use some data for underwriting. Do we want employers to keep a watch on the emotions of their employees and pass that data to their insurer?

“A dark side of insurance is the anti-selection process. We now understand the risks, so is there danger of who gets insurance?”

Mr McPherson says this is why humans are required in the final decision-making process.

“I don’t think you can spot fraud using telemetry. Insurers cannot use information in isolation, so they need to look at their data sets and we still need a strong sense of judgement to make the final decision.

“I don’t think data will replace the current underwriting strategies, but it will complement it.”