What AI Is–and Isn’t–Doing in Life Insurance Underwriting

Artificial Intelligence (AI) is transforming life insurance underwriting by delivering speed, accuracy, and efficiency to medical record reviews–traditionally one of the most time-consuming and inefficient aspects of underwriting. However, while AI is revolutionizing the process, it’s essential to understand its capabilities and limitations. Let’s explore what AI is, and isn’t, doing in life insurance underwriting today.

What AI Is Doing in Life Insurance Underwriting

AI is reshaping life insurance underwriting by streamlining workflows, enhancing accuracy, and accelerating decision-making. By taking on tedious tasks like parsing dense medical records, AI allows underwriters to focus on strategic, high-value decisions.

1. Extracting and Summarizing Data
   Cutting-edge AI solutions, like DigitalOwl’s, utilize a combination of natural language processing (NLP) and optical character recognition (OCR) to analyze medical records, including EHRs and APSs. These systems identify and extract critical data points, such as medications, conditions, symptoms, and dates, while adding context through modifiers (e.g., whether a medication is current or past).‍
2. Reducing Medical Record Review Time
   By deduplicating data and highlighting the most relevant details, AI allows underwriters to quickly find the information they need without sifting through hundreds of pages. This can significantly reduce the time underwriters spend on medical reviews–with DigitalOwl’s clients reporting over 60% efficiency gains. ‍
3. Ensuring Consistency and Accuracy
   AI standardizes how medical records are presented, regardless of the source (EHRs, APSs, etc.). This uniformity ensures a consistent user experience while prioritizing accuracy by reducing "misses" (critical details not flagged) and managing "noise" (non-critical flagged information).‍
4. Interpreting Handwritten Notes
   AI has advanced to include the ability to analyze handwritten notes and fillable forms. While this feature is continually improving, it ensures that even handwritten data is flagged for review, enhancing the overall completeness of record analysis.‍
5. Providing Actionable Insights
   Moving beyond summarization, DigitalOwl’s newest product Case Notes can surface advanced insights, such as identifying trends, assessing condition progression, and spotting abnormalities. These insights help underwriters understand the big picture and make more informed decisions.

What AI Isn’t Doing in Life Insurance Underwriting

While AI is transforming medical record reviews with greater speed and efficiency, it’s equally important to address what it doesn’t do. Understanding these limitations highlights why AI is a safe and reliable tool that enhances, rather than replaces, human expertise in life insurance underwriting.

1. Replacing Underwriters
   AI is designed to assist underwriters—not replace them. It handles the time-consuming tasks of data extraction and organization, allowing underwriters to focus on the art of complex decision-making.
2. Undermining Underwriting Guidelines
   DigitalOwl’s AI does not assess mortality as a black box or outside established industry guidelines. It operates with complete transparency, offering click-to-evidence functionality for seamless data verification and ensuring full compliance with regulatory standards.
3. Making Autonomous Decisions
   DigitalOwl’s AI operates within predefined parameters to support human expertise, but doesn’t make independent decisions in the underwriting process.
4. Eliminating All Errors
   While AI is highly accurate, it’s not perfect. For example, it might misinterpret acronyms like "PE" (Physical Exam) as "Pulmonary Embolism." To mitigate this, DigitalOwl’s AI errs on the side of caution by flagging the data for human review.

The Future of AI in Life Insurance Underwriting

AI technology in underwriting is advancing rapidly. Innovations like natural language chat interfaces and tailored underwriting manual ingestion are already making waves. These tools enable underwriters to query specific details, such as whether an applicant is using a CPAP machine, and receive concise, relevant responses without poring over hundreds of pages.

Additionally, post-issue audit tools are being refined to flag cases needing attention, further enhancing efficiency and accuracy. As AI continues to evolve, it will enable life insurers to offer faster, smarter, and more reliable underwriting processes.

Discover how DigitalOwl’s AI-powered solutions are transforming life insurance underwriting. Visit DigitalOwl today to see how AI can enhance your workflows and improve decision-making.