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In a constantly developing industry, many financial companies are utilizing technology in transformative ways to offer consumers better access to products and services. These improvements vary from offering faster online loan applications, to connecting consumers with online bank accounts, or instantly facilitating investments made via mobile device.
Now more than ever, consumers can access financial products and services faster and more easily. Keeping with this trend, the life insurance industry is seeing its own share of innovation. Many of the best life insurance companies are revolutionizing the way consumers obtain life insurance with novel technology.
Haven Life, an online life insurance agency backed and wholly owned by MassMutual, is a shining example of how technology can be used to better serve life insurance buyers. With a unique AI algorithm and innovative analysis of industry data, Haven Life can offer consumers instant policy decisions through an online application.
I had the opportunity to interview Mark Sayre, the Head of Risk Solutions at Haven Life, about how they are innovating to better serve consumers and the life insurance space. Check out the Q&A to learn more!
In this Q&A:
- Starting with Haven Life as Head of Risk Solutions
- How Life Insurance Is Changing for Tomorrow
- Why Haven Life Specializes in Term Life Insurance
- Interesting Facts About Mark Sayre
Starting with Haven Life as Head of Risk Solutions
Q: How did your previous experience prepare you for Head of Risk Solutions at Haven Life, a major technology-based life insurance agency?
A: Prior to Haven Life, I spent four years in the Actuarial Leadership Development Program at MassMutual (our parent company), learning to become an actuary while rotating through different areas within the company. I spent some time in annuities, some time in corporate finance, and even a stint in corporate strategy.
Those experiences gave me a strong foundation in life insurance, including risk management and product design, but also provided a lens into the strategic challenges for the industry over the coming decade. That prepared me for my role at Haven Life, a MassMutual-backed, online life insurance agency, in which I am leading my team to solve those strategic challenges by innovating around the products and underwriting experience.
Q: What was the most exciting aspect of working for Haven Life providing AI-based solutions to life insurance underwriting?
A: Starting with a blank canvas. When I first began working with Haven Life, no companies in the U.S. were underwriting at the level required for a fully underwritten term product in the span of 40 seconds. The underwriting process was clunky, inefficient, and extremely reliant on human processes and reviews. By partnering with MassMutual, we had the opportunity to start from scratch.
We created the Haven Term policy, issued by MassMutual, from the ground up with an easy online purchasing experience in mind and built all the technology needed to accomplish it. We pieced together an underwriting solution which put algorithmic approaches first. It hasn’t only dramatically improved our customer’s experience, but it’s also enabled us to learn rapidly and iterate quickly as we see trends emerge.
How Life Insurance Is Changing for Tomorrow
Q: What problems do you see in the life insurance industry today? How do these problems impact consumers?
A: The industry struggles with complexity. The products are complicated, the forms are complicated, and the language is complicated. Sometimes this complexity is inescapable, but in most instances, it’s purely the result of legacy technology, legacy processes, and stagnant culture. The impact to the consumer is high – buying protection for their families should be a relief, and yet we’ve turned it into a burden.
Our challenge is to put the customer first – their needs and purchasing preferences – and to design a buying experience that is simple and even delightful while seamlessly masking all of the complexity that lives behind that experience.
Q: How does Haven Life utilize AI to address these problems? How does AI revolutionize the life insurance underwriting process?
A: The typical life insurance underwriting process takes several weeks, requires countless forms, and numerous touchpoints. In contrast, for eligible applicants, the Haven Term policy can be underwritten by MassMutual entirely online in less than a minute, even if most applicants will need a medical exam to finalize coverage. AI capabilities allow us to underwrite without taking on unnecessary risk, which ultimately prevents our customers from having to choose between affordable prices and convenience.
Q: Are you able to elaborate on how the data used in the underwriting process leads to a faster, more effective life insurance quote? How does Haven Life’s use of data differ from more traditional life insurance agencies?
A: The data accessed in the underwriting process is standard within the industry. The difference is in our modeling capabilities and our advanced logic. Thanks to MassMutual’s data science team, we are able to build machine-learning models that derive insights into the nature of the relationships between underwriting data and mortality that traditional methods are unable to find.
This allows us to rely more heavily on data available in real-time without sacrificing the overall accuracy of the underwriting program at the highest level. Additionally, our advanced rules engine controls for bad behavior around the margins of our data in a way which gives us comfort in algorithmically-generated underwriting offers.
Why Haven Life Specializes in Term Life Insurance
Q: Why does Haven Life focus solely on term life insurance? Was the decision based on compatibility with Haven Life AI or simply product preference?
A: Term life insurance is a simple and easy-to-understand product that most customers know they need, and yet so many people in our country go unprotected because the buying process is needlessly complicated.
While the design of the product is simple, the underwriting is not. Mortality risk represents a large portion of the risks within the product; therefore, accurately assessing each individual’s mortality risk is key. Our AI leverages more than 20 years of MassMutual mortality experience to help ensure a high level of accuracy.
Q: How does the risk of a term life product compare to other policies?
A: There are many different types of term life products, and one of the distinguishing factors is underwriting methodology. At one end of the spectrum, you have Simplified Issue term products which feature short and simple applications, limited use of underwriting data, and minimal price differentiation by risk.
At the other end of the spectrum, you have Fully Underwritten term, which features a much larger, more robust application and a dramatically expanded set of data inputs in order to differentiate more granularly on the price for each individual applicant.
Mortality risk is higher for a simplified issue product (as is the price). In addition, the misestimation risk (or the risk that your mortality assessment through underwriting is wrong) is also higher, because the limited number of inputs increase the variance around your decision.
Relative to other types of life insurance products such as universal life and whole life, mortality risk is a larger consideration in term life products as it focuses purely on protection.
Q: What challenges does a term life insurance policy have over other policies from an underwriting and business perspective?
A: As the financial performance of term life insurance is so largely driven by mortality risk, the underwriting challenges are much higher for these products, increasing the operational costs for the business and necessitating more specialized (and therefore more expensive) talent in the organization.
Interesting Facts About Mark Sayre
Q: Disclaimer: I am not an opera-singing expert, so apologies if these questions seem very basic. I heard you were a part-time opera singer, so I figured I would ask: Do you have a favorite opera singer? Why is he or she your favorite?
A: I really like Piotr Beczala. He has an incredible voice and amazing technique, but more than that he really adopts the character he is portraying and you can feel that no matter where you are in the theater. His performance of “Kuda, Kuda” from Eugene Onegin is heart-wrenchingly beautiful.
Q: What opera voice type are you? Do you specialize in that voice type?
A: I am a bass-baritone! I predominantly sing baritone in choirs or in the rare instance where I perform in an opera. I will occasionally sing bass to help out where I can, and I do have some pretty low notes (especially on a Sunday morning after a fun night out). You’ll almost never catch me singing tenor, unless the director is specifically going for the sound of a dying cat or a pre-pubescent teen.
About Haven Life
Check out our Haven Life Insurance Review to learn more.
Haven Term is a Term Life Insurance Policy (ICC17DTC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111 and offered exclusively through Haven Life Insurance Agency, LLC. Policy and rider form numbers and features may vary by state and may not be available in all states. In NY, Haven Term is DTC-NY 1017; the license number is OK71922 in CA and 100139527 in AR.
About Mark Sayre
As Head of Risk Solutions at Haven Life, Mark Sayre oversees underwriting, actuarial, analytics, and reinsurance teams, driving innovation in support of several business lines.
Author: Andrew Rombach