In recent years, much of the discussion for growth in the life insurance market has focused on tapping into the middle market. Articles in National Underwriter, LIMRA’s MarketFacts and even this newsletter have described the market potential of this segment and the opportunity to grow organically.
Traditional Simplified Issue
To date, the most common way to access this market has been through simplified issue policies. The product has been effective in a number of ways…
- It meets simple death protection needs.
- It bypasses invasive and costly underwriting while delivering protective value.
- While rates are higher than fully underwritten term, it is affordable for those with moderate disposable income.
A big downside of simplified issue has been the degree of underwriting uncertainty associated with these policies. Because no medical underwriting is required, it must be priced to reflect higher expected mortality. So the big question always left in the air has been “How can we access this market with a more affordable product?”
A New Approach to Simplified Issue
The company created Quantitative Data Solutions (QDS) to offer solutions that address the weaknesses associated with traditional simplified issue. We have combined reinsurance and product development with a state-of-the-art underwriting capability – VelogicaSM – that uses prescription drug history in the underwriting process.
This technology-enabled solution allows companies to reach the middle market with a product that offers:
- Underwriting decisions in minutes
- More coverage than traditional simplified issue
- Pricing advantage over traditional simplified issue or non-medically
underwritten life insurance products
The protective value created by the use of prescription drug data in underwriting policy applications means that clients can offer more competitive rates on 10-, 20- or 30-year term policies with face amounts of up to $250,000.
Simplicity and Speed
Velogica uses an electronic application that is simple and easy to navigate. Because there is no free text in the application, underwriting takes a matter of minutes, which allows for a good consumer/ producer experience.
The combination of speed and the uniqueness of a sophisticated algorithm that uses prescription history, motor vehicle and MIB data sets Velogica apart in the marketplace. The company supports the Velogica underwriting platform with a comprehensive and integrated coinsurance program to get our clients to market quickly.
QDS supports clients with its own team of dedicated underwriters, actuaries, IT programers, operations and program support staff, all backed by the full support and expertise of Transamerica Reinsurance. If your company is seeking new opportunities for organic growth in the middle market, please contact me or your account executive to learn more about Velogica .