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Motor vehicle records: RGA Reinsurance.

What It Is

Evidence-based research confirmed that driving behavior could be used as a factor in underwriting life insurance. RGA researched the correlation between motor vehicle records and mortality rate, the results of which have led to a more nuanced approach for using those records for life insurance underwriting, including risk stratifications by age and gender, number of violations and the type and severity of violations.

Why It Is Innovative

Motor vehicle records have commonly been used as a tool for assessing the risk profile of life insurance applicants. With the expanded availability of new forms of electronic underwriting evidence and increasing pressures on the budgets for underwriting evidence, many of RGA's client companies had begun to reconsider the cost/benefit trade-off of ordering motor vehicle records for life insurance underwriting. The study was the first of its kind in the industry and demonstrated the predictive power that can be derived from motor vehicle records in life insurance underwriting. The conventional wisdom held that the extra mortality risk of bad drivers could be attributed primarily to motor vehicle accidents and that substandard premiums therefore should be charged as a constant flat extra amount at all ages. The study results suggest that the magnitude and shape of the risk curve are indicative of extra all-cause mortality, which is likely to be more appropriately reflected with a table rating (or mortality multiple) similar to the way medical impairments might be underwritten.

Measure of Success

RGA provides research into actuarial, medical and underwriting topics as a service for its clients. This has led RGA to the largest new-business market share among U.S. reinsurers. RGA was voted "Best Overall Life Reinsurer" for the fourth consecutive time by North American life insurers in the 2011 Flasp6hler Cedant Survey (Life -North America). In this biennial survey, cedants ranked RGA first in medical underwriting capabilities, strong client orientation, leading expertise and market knowledge and leading actuarial product development expertise.

How It Was Implemented

RGA partnered with LexisNexis in 2010 to study the link between a life insurance applicant's MVR and his or her mortality risk. The study covered more than 7 million insurance applicants and more than 73,000 deaths. The study results enabled the quantification of the relative risk of applicants based on their driving records and have provided a robust framework for assessing the protective value of MVRs within a life insurance underwriting setting. A need existed to quantify and validate the value of motor vehicle records and to develop intelligence to optimize the implementation of this evidence in life insurance underwriting. Following the needs assessment, we educated ourselves on motor vehicle records by inviting vendors and other industry experts to share their knowledge with us. In a meeting with LexisNexis, we suggested a joint study, which would enable RGA to provide our industry-leading mortality research and underwriting expertise to our clients in a way that would provide a credible analysis of the efficacy of MVRs in life underwriting. Five RGA Actuarial Research, Underwriting, and Medical associates were directly involved in the study execution and underwriting risk scoring, while other associates provided additional support. The research study and underwriting risk scoring development work took approximately nine months.

Expert Review

"This organization is using data, internal and external, for innovative information 'insight.' This innovative use of data (motor vehicle records to mortality tables) is providing insurers the ability to accomplish more granular risk segmentation, customer segmentation and find correlations between data and risks/customers. They seem to be the leading cusp in the use of data in the life industry."


Bill Jenkins

Managing Partner

Agile Insurance Technologies

To view the complete study: Go to, click on Knowledge Center, and enter the key words Motor Vehicles.
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Title Annotation:INNOVATION SHOWCASE: Life Underwriting
Author:Jenkins, Bill
Publication:Best's Review
Date:Jan 1, 2013
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