Applied Underwriters has announced the formation of Album Life Assurance, a partnership between Applied and Health Outlook, a health prediction company.
Album Life Assurance’s mission is to find innovative ways to use life science and biotechnology to enhance personalized life insurance and related products, Applied said. The company plans to offer term life insurance, long-term care insurance and catastrophic health insurance. Initially, term life insurance will be offered in select US markets, while term life and catastrophic health will be offered in select foreign markets.
Applied Underwriters chairman Steve Menzies said that the life insurance market remained largely unchanged for decades, but is now rapidly evolving into an online-centric model.
“There is a massive amount of momentum in the life insurance industry towards underwriting through the analysis of big data,” Menzies said. “This is an effort to cut costs and enable rapid, online underwriting and sales. But we believe there are some difficult tradeoffs coming for our competitors – namely, underwriting costs will almost certainly rise, and customer trust and satisfaction will almost certainly suffer.”
Menzies said that while the new methods might be convenient, people were becoming increasingly uncomfortable with intrusions into their personal data.
“Especially when they are personally the subject of the decision being made, they don’t trust big-data presumptions that work in ways no one really understands,” he said. “At Album, we’ll utilize traditional life underwriting methods, but significantly enhanced by the application of ongoing scientific discoveries. Health Outlook will handle developing the biotechnology applications; Applied will handle developing the related statistical research and data analytics. The resultant products will be innovative and have the potential to be very beneficial to our policyholders.”
“We at Health Outlook have lofty aspirations for ourselves with a vision for Album Life Assurance,” said Howard Sams, CEO of Health Outlook. “If we were better able to predict disease and mortality, then there could be more opportunities for early intervention than are available today, and life expectancy and human quality of life could be meaningfully enhanced.”
Album Life Assurance will be headquartered in New York. It expects to begin accepting applications for insurance in the third quarter of 2023.