For decades, life insurance has operated in a reactive mode, assessing risk based on historical data and static information. In the past, with limited data, this reactive approach was the only option.
Now, advancements in AI are transforming the industry, enabling insurers to move past reactive risk assessment. AI is uniquely able to support proactive, preventive coverage. This approach is redefining underwriting by incorporating vast data sources to build a comprehensive and dynamic risk profile for each policyholder.
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By leveraging real-time data – from wearable devices, electronic health records, claims data, lifestyle analytics, and more – to inform AI-driven predictive analytics, insurers can detect potential health risks early, encourage healthier behaviors, and provide personalised policies that more accurately reflect policyholder needs and lifestyles.
Life insurance is no longer a static contract but a dynamic partnership in your long-term well-being. This shift allows insurers to better understand and manage risk while providing policyholders with personalised guidance, proactive health insights, and life insurance that truly evolves with their needs. The result? A more reliable, human-centered life insurance market for us.
Predictive Analytics and Early Intervention
In today’s digital world, we have a plethora of real-time lifestyle data at our fingertips from a variety of sources – smartwatches, fitness trackers, even the phones in our pockets are constantly collecting highly valuable and informative health metrics. AI-powered life insurance programmes are able to leverage that data to create insurance plans that reflect policyholders’ wellness more keenly than ever before.
Pairing this data with predictive analytics allows insurers to detect warning signs of chronic conditions for policyholders, such as hypertension or diabetes, before they develop into more serious health issues. For example, by tracking heart rate variability, sleep patterns, and activity levels, insurers can identify potential health risks and guide policyholders to avert them before they escalate.
In this way, consumers can be empowered to live healthier lives through personalised wellness recommendations and rewards for healthy behaviors – such as lower premiums and additional health benefits – while insurers can leverage from the ability to offer more accurate premium rates and reduce risks
Incentive Programmes
Interactive life insurance models that incentivise healthier lifestyles are emerging, encouraging policyholders to adopt and maintain healthier habits. Research has shown that targeted lifestyle interventions can prevent 80% of chronic illnesses, reducing the need for costly intervention for both insurers and policyholders.
Gamification – the act of boosting engagement with systems and services by integrating game design principles and an overall element of fun – is key to this trend. In this context, gamified life insurance can incentivise users to engage with wellness initiatives by offering unique rewards. Achieve a fitness goal? Get premium discounts. Attend multiple preventative health checkups? Receive a gift card.
Some insurers now integrate with mobile health apps to provide real-time feedback and guidance, nudging policyholders toward healthier behaviors. For example, Vitality offers discounted anti-obesity medication and wellness coaching to encourage policyholders to maintain healthier lifestyles.
The Proactive Wellbeing Gap
In the healthcare world, missing the critical window for preventive care can lead to severe health complications and costly medical interventions for conditions that could have been prevented. A recent AANP survey showed that 27% of Americans are not up to date with their immunisations and preventive screenings, including screenings for heart disease, diabetes, and cancer.
AI presents a significant opportunity to bridge this gap – proactively identifying risks and encouraging early medical intervention ahead of time.
For instance, AI-driven virtual health assistants can remind policyholders to schedule checkups, flag irregular biometric data, and suggest tailored wellness plans. This proactive approach helps insurers mitigate risk while simultaneously fostering stronger, more engaged relationships with customers.
Insurers can take it a step further by leveraging predictive risk models to analyse vast sets of policyholder health data. This allows them to simulate various hypothetical health outcomes, enabling more precise risk assessments and proactive policy adjustments.
Future-Facing Insurance Deserves Future-Forward Tech
AI is revitalising life insurance’s longstanding reactive model, catalysing a shift in the industry towards personalised prevention – to the benefit of both insurers and policyholders. By leveraging policyholders’ real-time health data, predictive analytics, and behavioral incentives, insurers can create a more dynamic and responsive approach to coverage — one that prioritises longevity and wellbeing over simple risk mitigation.
The shift from static underwriting models to customer-centric, hyper-personalised coverage is defining the future of the industry. Insurers that embrace proactive AI-driven models will not only enhance their own profitability but also improve the wellbeing of their customers.
It’s not just about making life insurance better – it’s about making life better, period.
Calvin Zhai is the Product Marketing Strategy Manager for Sapiens Life & Annuities (L&A)
