Life insurers rethink underwriting as longevity data matures

Longer lifespans and richer health data are forcing a rewrite of the life and health insurance playbook.

ThemeAnax 6 min read
A family waits at a crosswalk with children holding an umbrella on a sunny day.
Share

There is no shortage of advice about Industry insights. There is a shortage of advice that survives contact with a real week.

The situation

Documentation is a symptom: you write it where the design is unclear. The decision is usually cheap and reversible; the execution is where the cost lives, and that is where the argument should have happened.

graphical user interface
Photo by Deng Xiang on Unsplash

The default answer is right often enough to be dangerous. Handoffs between people who each hold a coherent local picture and no shared one produce most of the pain later attributed to tooling.

Speed and reversibility are the trade-off worth naming out loud. Where a design is obvious the prose is short, so the length of an explanation is a reasonable proxy for where to look next. The counter-argument deserves a hearing, and it is stronger than its usual proponents make it sound.

What we tried first

A shared definition of "done" removes more friction than any tool. Success has many causes and teaches very little; failure tends to have one, and it is usually obvious in hindsight.

The expensive mistakes here are rarely the technical ones. Being right sixty per cent of the time builds exactly the kind of confidence that makes the other forty per cent expensive.

What changed

The tooling question is downstream of the constraint question. If you learn on Friday what you assumed on Monday, the assumption never has time to become an architecture. The clearest signal was that people stopped asking where things were.

Consider the failure mode rather than the success case. The first quarter shows the intended effect; the second shows what the intended effect displaced. The version of this that works fits on an index card. The version that fails needs an onboarding session.

What it cost

Consistency is worth more than any individual improvement to Industry insights. A small improvement applied consistently beats a dramatic one applied once, which is unsatisfying advice precisely because it is correct. When we mapped it out, four of the seven steps existed only to compensate for the second one.

The first thing to establish is what you are actually optimising for. Teams that pick both end up with neither, and usually discover this at the point where reversing would have mattered.

How we knew it was working

Feedback loops shorter than the planning cycle change everything. It is comfortable, it is legible to management, and it is close to worthless once you measure what it actually changes. In practice the answer showed up in the calendar before it showed up in the dashboard.

The compounding effects matter far more than the individual wins. The stated constraint is usually a proxy for a real one nobody wants to say aloud, and optimising the proxy is wasted effort. There are organisations where the opposite is true, and they are not obviously worse off.

Measurement is usually where this falls apart. Industry insights rewards clarity here more than almost anywhere else, because the wrong target produces work that looks productive and moves nothing.

The bottleneck is never where you think it is — that is what makes it a bottleneck.

— Overheard in a retrospective

Where it still breaks

Most of the difficulty lives at the boundaries, not in the middle. Choosing infrastructure before agreeing what it is for is how organisations end up maintaining a system nobody wanted. One team we spoke to cut their review stage entirely and found throughput unchanged, which told them something the metrics had not.

The second-order effects arrive about a quarter after the first-order ones. The things that are easy to count are rarely the things that matter, and once a number reaches a dashboard it starts shaping behaviour whether or not it deserves to.

The numbers

There is a version of Industry insights that is mostly ritual. When responsibility is spread across a group, the work that falls between the named parts is the work that does not happen.

It helps to separate the decision from the execution. Subtraction is structurally underrated: the meeting that stopped happening leaves no artefact to point at in a review. We ran both approaches in parallel for six weeks. The difference was smaller than the cost of the debate about it.

What looks like a process problem is frequently an ownership problem. They are decisions made quickly, defended slowly, and built upon for six months before anyone recalculates. It is worth saying that we have not run this long enough to be confident.

A few things worth checking before you commit:

  1. Prefer the reversible option when the evidence is thin
  2. Decide in advance what would make you stop
  3. Agree on what "done" means, in writing, before starting
  4. Write the constraint down before choosing a tool

The part that surprised us

Nobody gets credit for the work that did not need doing. Most disagreements that present as strategic turn out, on inspection, to be two people using one word for two things. A useful test: if this disappeared tomorrow, how long before anyone noticed?

The interesting constraint is almost never the one in the brief. Cutting scope early is cheap and slightly embarrassing; cutting it late is expensive and deeply embarrassing.

Scope is the variable everyone adjusts last and should adjust first. A team that changes approach every quarter pays a coordination tax that routinely exceeds whatever the change was meant to fix. Set a date at which you will stop, and write down in advance what would make you stop earlier.

What we would do differently

Consider the failure mode rather than the success case. The first quarter shows the intended effect; the second shows what the intended effect displaced. Try writing the constraint on one line before opening a vendor comparison; the line is usually harder than the comparison.

Consistency is worth more than any individual improvement to Industry insights. Teams that pick both end up with neither, and usually discover this at the point where reversing would have mattered. Ask what would have to be true for the opposite approach to be correct, and see whether anyone can answer.

The situation

The default answer is right often enough to be dangerous. Being right sixty per cent of the time builds exactly the kind of confidence that makes the other forty per cent expensive. Try writing the constraint on one line before opening a vendor comparison; the line is usually harder than the comparison.

Nobody gets credit for the work that did not need doing. The stated constraint is usually a proxy for a real one nobody wants to say aloud, and optimising the proxy is wasted effort. Set a date at which you will stop, and write down in advance what would make you stop earlier.

What we tried first

Speed and reversibility are the trade-off worth naming out loud. The decision is usually cheap and reversible; the execution is where the cost lives, and that is where the argument should have happened.

The first thing to establish is what you are actually optimising for. When responsibility is spread across a group, the work that falls between the named parts is the work that does not happen.

Feedback loops shorter than the planning cycle change everything. Handoffs between people who each hold a coherent local picture and no shared one produce most of the pain later attributed to tooling. When we mapped it out, four of the seven steps existed only to compensate for the second one.

What changed

Scope is the variable everyone adjusts last and should adjust first. The things that are easy to count are rarely the things that matter, and once a number reaches a dashboard it starts shaping behaviour whether or not it deserves to. One team we spoke to cut their review stage entirely and found throughput unchanged, which told them something the metrics had not.

The second-order effects arrive about a quarter after the first-order ones. Choosing infrastructure before agreeing what it is for is how organisations end up maintaining a system nobody wanted. That said, none of this generalises cleanly across team sizes.

What it cost

The interesting constraint is almost never the one in the brief. A small improvement applied consistently beats a dramatic one applied once, which is unsatisfying advice precisely because it is correct.

The tooling question is downstream of the constraint question. Industry insights rewards clarity here more than almost anywhere else, because the wrong target produces work that looks productive and moves nothing. The caveat is that all of this assumes the underlying goal is settled, which is frequently the actual problem.

None of this generalises perfectly. Take the parts that map onto your constraints and discard the rest — that is what the framing is for.

baseline

Thoughts, stories and ideas.

Check your inbox for the link.

Free. Unsubscribe from the foot of any issue.