The Impact of AI on Health Carrier Underwriting: Insights From Industry Experts

Jason Oswald, Director of Solution Consulting, Group Health at Gradient AI

Artificial intelligence (AI) is reshaping industries across the board, but its role in the group health underwriting in the carrier space is particularly compelling. Who is using AI, and why? How are underwriters leveraging data, AI, and advanced analytics to secure new business and optimize their portfolios?

These questions were central to a recent webinar that I participated in on the impact of AI on health carrier underwriting. I was joined by industry leaders, Mike Harris, vice president of Major Group, Chamber, Associations, and Student Health Plans at BlueCross BlueShield of South Carolina and Jay Sheehy, chief underwriting officer at Gravie. Together, we brought decades of experience, each offering unique insights on how AI is being integrated into the underwriting processes.

For those of you who couldn’t attend, here are the main points and key takeaways from our discussion.

1. What is driving carriers to consider AI in group health underwriting?

The consensus among the panelists was that the primary motivation for adopting AI in group health underwriting is to gain deeper insights into group risk, enabling faster and more informed decision-making. AI allows carriers to streamline workflows, prioritize favorable risks, and manage fewer desirable risks more effectively, leading to better outcomes for both insurers and insureds.

In my view, being able to get a decision faster moves the good risk to the top of the pile and allows sales, underwriting, and management teams to focus on winning those groups, while bad risk gets de-prioritized because companies do not have unlimited resources or time. 

2. What challenges are carriers trying to solve with AI?

While speed, accuracy, and profitability are universal goals, the specific challenges that carriers aim to address with AI can vary. For some, AI is a tool for expanding into new markets, while for others, it enhances an understaffed or inexperienced underwriting team.

Harris highlighted the competitive nature of the market, particularly with smaller groups where limited data poses a challenge. “We needed a better way to evaluate risk,” Harris explained. “AI provided us with a new perspective, allowing us to be more aggressive when necessary.” Sheehy, a newer, growing payer, emphasized the need for scalability, noting that AI allows its company’s underwriters to focus on financial decision-making while machines handle the analytics.

3. What impact has AI had on health carrier underwriting?

AI’s strength is ability to combine machine learning with human expertise has proven invaluable. The technology does not replace underwriters but enhances their ability to process and prioritize risks efficiently. It helps identify groups to focus on, and underwriters can use that data to push more quotes through at favored risk levels.

Throughout our discussion, we emphasized the importance of data in making accurate risk predictions. Sheehy remarked, “Predictive models can give you 300 different scenarios in minutes, a task that would take an underwriter hours to do manually.”

4. What results have you seen since integrating AI?

Harris shared how AI has allowed BlueCross BlueShield of South Carolina to target specific accounts and improve their overall risk assessment. After initially testing AI in one segment, the company expanded its use across all segments due to its clear value.

Sheehy described how AI has improved their turnaround times and data accuracy, leading to better risk projections and more accurate pricing.

5. How did you handle change management when implementing AI?

Implementing AI requires careful change management, particularly when introducing new tools to teams. Harris noted that there was an initial pushback from his sales team, but as they became familiar with AI’s speed and accuracy, they embraced the technology. Similarly, underwriters recognized the value of AI after seeing its effectiveness in a test segment.

Sheehy explained that because his company was in a growth phase, they incorporated AI into their processes from the start, avoiding some of the change management challenges faced by more established organizations.

6. What is the future of AI?

In closing, we all agreed on the importance of carriers engaging with AI, evaluating how it aligns with their market goals and technological investments.

Both Sheehy and Harris pointed out that AI is still in its early stages, with unlimited potential for future applications. Whether it’s creating tailored programs for employers or improving financial protections, AI’s role in underwriting is set to expand significantly.

As AI continues to evolve, its integration into group health underwriting offers carriers new opportunities to enhance decision-making, streamline operations, and improve overall plan performance. The insights shared provide a valuable roadmap for carriers considering AI’s potential impact on their business.