The next selfie you take may determine how much you’re going to pay for that life insurance policy.
Lapetus Solutions, a two-year-old startup based in Wilmington, North Carolina, has developed technology to assess a whether a person is aging slower, faster or at par with their chronological age based on a selfie and a series of questions. Beyond the obvious clues to aging, facial lines can also offer clues to other health ailments that can influence how long an individual will live, including whether or not they smoke or body mass index. These insights can help insurers figure out premium costs and radically cut down the time it takes to evaluate life insurance applicants, said the company.
“Today, you answer a 10-page application and a medical exam and it takes several weeks before you get approved,” said Janet Anderson, CMO of Lapetus Solutions. “With our tool, we’re able to provide this insight without any sort of medical exam. We’re able to provide immediate feedback on photographs and based on questions we ask.”
The software became available to insurers this year, and according to the company at least one national insurer is testing the technology. Discussions are ongoing with other providers about possibilities to onboard it. Insurance technology observers, however, say that while providers are keenly watching the evolution of the technology, it will take years to put into practice.
Anderson emphasized that facial analytics alone don’t determine Lapetus’ assessment of life expectancy for insurance underwriting purposes. Individuals are asked a series of questions similar to what an insurer would ask, along with additional information that could include insights into family history and age of menopause. The results of the questions, combined with the facial analytics technology, determines the result, she said. The analysis of the face is based on a selfie that’s uploaded to the company’s software platform.
“It’s certainly very early stage,” said Matthew Josefowicz, CEO of Novarica, a research and consulting firm that focuses on insurance. “It’s a good example of the ways that insurers are thinking about how emerging technology can change the life insurance buying process that is so clearly broken.”
Given the pace of technological advances, the process of applying for life insurance needs disruption, Josefowicz said, as applicants must currently submit to an onerous process of questioning and medical exams that can take weeks or sometimes months, and dissuades many from applying.
That is similar to findings of a McKinsey study released last month, which argued that legacy insurance companies that don’t quickly embrace technological change will find it “increasingly challenging” to generate attractive returns. Facial analytics is one tool insurers are looking at, in addition to data from wearables. But adoption of facial analytics as a viable underwriting tool will depend on tests by regulators and consumers.
“There’s a ways to go before social and regulatory acceptance of that,” Josefowicz said. “Anybody offering the technology needs to prove that it’s predictive and that it’s not discriminatory, and prove to regulators that this is viable — and create some social acceptance around it.”
Others argue that the use of facial analytics for underwriting could drive up premium costs.
“I don’t think it’s looking for things that make you look good,” said Tom Scales, head of Americas for life, annuity and health at Celent. “It could drive up the cost of insurance which could draw the ire of state regulators and customers.”
Given the industry’s risk aversion and other concerns, what may be more realistic is a hybrid model.
“The most likely scenario is that there will be a blend of traditional and new approaches to assessing risk,” said Mark Breading, partner at consulting firm Strategy Meets Action. “If this technology is proven to be reliable and has strong predictive capability, insurers are likely to push for its use, but information regarding medical history and lifestyle will always be important as well.”