Comprehensive Information Collection and Non-physiological Risk Management in Underwriting: From Habit and Environment Investigations and Financial Background Checks to Survival Investigations

2. Non-physiological factors (1) Occupation. Occupations can be classified into accident-risk occupations, health-risk occupations, and work environment-risk occupations according to their degree of danger. Most life insurance companies have set maximum insurance amounts and occupational level rates for dangerous occupations as the basis for underwriting. When an occupation changes, the occupational category should be reclassified and a new insurance rate should be determined. (2) Habits. Habits mainly refer to some bad lifestyle habits, such as smoking, drinking, and especially drug abuse. These seriously harm people's physical and mental health and even increase the possibility of sudden death. In modern living conditions, the existence of habits has an increasingly greater impact on mortality, which has become a factor that cannot be ignored during underwriting. (3) Environment. The environment includes the natural environment (living and working environment) and the social environment (interpersonal relationships and surrounding conditions). A good environment has a significant effect on reducing mortality, while a bad environment will inevitably have an adverse effect on people's physical and mental health. (4) Economic status. On the one hand, it depends on whether the policyholder has enough income to pay the premium, and on the other hand, it depends on whether the beneficiary's current income is too disparate from the possible future income. This factor is also considered to avoid moral hazard. (5) Motivation for insurance. The main consideration is whether there is a moral hazard. This can be examined by combining the insured's age, occupation, health status, economic status, hobbies, past records, whether important information has been concealed, and the payment method of the insurance. (6) Payment method. In practice, the payment method is still one of the criteria for judging whether there is a moral hazard. If the application for insurance is made in a lump sum, the moral hazard is relatively small. If the policyholder insists on paying monthly for high-value insurance, especially for insurance with premium waiver and double payment for accidental death, the underwriter needs to conduct further investigation to find out the real reason.

(II) Information Collection To fully consider various risk factors, underwriters must have sufficient information and data to screen, analyze, and judge. 1. Application Form The application form is the first-hand information for underwriting and the most original record of risk selection. It is an important component of the insurance contract. Underwriting involves determining the insured's risk level and the applicable insurance type and premium rate from the information in the application form. 2. Supplementary Questionnaire The questionnaire mainly obtains supplementary information and specific health conditions. This form is particularly suitable for situations where the insured amount is not high, the premium is not high, but the medical examination cost is high. Questionnaires specifically designed for certain diseases can improve the accuracy of risk assessment. 3. Medical Examination Report The medical examination report has higher scientific rigor, objectivity, accuracy, and directness than other forms. It is mainly applicable to policies with insured amounts reaching a certain level. The insured is required to undergo a rigorous medical examination at a designated hospital or specialized medical examination institution. It is crucial to ensure that the examinee matches the insured to prevent impersonation. 4. Past Medical Records: Even if a disease is cured within a certain period, it may recur or leave sequelae. Reviewing past medical records generally requires the insured's consent. This helps underwriters improve the accuracy of their assessment of the insured's health status and risk level, especially in cases where the policyholder cannot provide detailed information. 5. Survival Survey: A survival survey obtains relevant information through direct and indirect investigations of the insured. Customer surveys are generally divided into direct and indirect surveys. Direct surveys involve face-to-face questioning of the customer. Indirect surveys involve questioning people around the insured. This helps identify gaps in information, provide timely remedies, and prevent adverse selection. 6. Financial Reports: Financial reports are primarily for high-value policies. Companies must provide insureds with their financial reports to understand their insurance purpose, renewal ability, and whether premiums are commensurate with their income. The reports include the insured's occupation, main sources of income, asset status, and past insurance history.

(III) Risk Assessment Risk assessment, also known as hazard calculation, involves evaluating the risk status of existing underwriting information and classifying policyholders into a specific risk level based on certain standards. Essentially, it's a quantitative analysis of risk. Risk assessment typically involves classifying each insured object into a risk level according to predetermined standards. Each level has a corresponding risk coefficient, and the sum of these coefficients (different from the base risk level) determines whether to increase the premium. (IV) Risk Judgment After assessing and classifying policyholders, they can ultimately be placed into a specific risk level. Life insurance companies most commonly use standard health groups and sub-health groups. There is also an uninsurable group, also known as a rejected group. The classification of risk levels can sometimes be influenced by competition between companies and the risk tolerance of each company.