Failure to Launch: Application Risks and Their Impact on Consumer Experience

From malicious bots to soft fraud, new technology introduces new risks to the life insurance application processes. Application errors, omissions and misrepresentation affect all life insurers. Direct-to-consumer channels are particularly susceptible to bot attacks focused on data harvesting. 

Fraud comes at a high cost to life insurers and consumers:

• A recent study has shown that there is an estimated $74.7 billion yearly in life insurance fraud costs.¹
• LexisNexis® Risk Solutions data shows that about 12% of life insurance applications include incorrect or omitted drivers license numbers.²

Did you know that there are three prevalent types of application fraud risks that are growing as digitazation creates new opportunities?

1. Bot attacks that use automated programs or scripts to submit mass fraudulent applications and harvest data.
2. Bad actors that deliberately use false information such as stolen or synthetic identities.
3. Errors and misrepresentation by individuals who omit or provide incorrect answers to gain approval or a lower premium.

How can you mitigate these risks while enhancing the application processes with technology?

• Modern technology-related risks facing life insurance companies, including emerging fraud risks.
• Tactics and technologies to help mitigate these risks.
• The value of verifying key data points early in the application process to avoid compounding errors that lead to delays—or worse.