Why one-size-fits-all underwriting is on its way out

Traditionally, underwriting has worked on a standard model: asking applicants a consistent set of medical questions and assessing their responses against established underwriting guidelines. This approach has served the industry well for decades and, when supported by modern technology, continues to provide a robust and efficient foundation for managing risk. But there’s still room for improvement.

In the last 12 months at TAL, we assessed over 100,000 member applications while consistently meeting our service commitments. In recent years we’ve also focused on building member-centred digital application pathways and optimising our Underwriting Rules Engine (URE), which has included refining mental health and musculoskeletal assessment questions.

As a result, we’ve continued to increase straight-through processing rates, reduce member effort and streamline decision-making, all while maintaining strong risk management disciplines and underwriting integrity.

Going beyond medical informaiton

While these advances have significantly improved the member experience, they also create an opportunity to explore how underwriting can become even more personalised. Risk assessment has typically centred on medical information and clinical outcomes. However, there is value in considering the role of biopsychosocial factors.

These include behavioural, psychological, social and environmental influences on how individuals respond to illness or injury and their ability to recover, adapt and sustain participation in work and daily life. Two people with the same diagnosis may experience very different outcomes based on factors such as their resilience, support networks, workplace environment, health literacy, financial stability and engagement with treatment.

TAL's underwriting team is exploring how these insights may complement traditional medical assessment, helping us better understand an individual’s risk while supporting a more informed, member-focused underwriting experience.

Adaptive underwriting: An evidence-based approach to risk

That focus on the individual sits alongside a second shift already underway: using broader evidence to sharpen how risk is assessed in the first place.

Today, there’s already some risk-based tailoring in how we underwrite. For example, certain application types require fewer questions, reflecting the nature of the risk. The shift we’re working towards is ‘adaptive underwriting’, which goes a step further. This approach uses evidence from a fund’s membership base and broader population data to build a more precise picture of risk before we’ve asked the member a single question.

In practice, this means recognising that different cohorts carry meaningfully different risk profiles based on characteristics like their age or occupation. Adaptive underwriting uses that evidence to ask a large proportion of applicants only high-level questions upfront, while directing more detailed, tailored questions only to those where specific risk factors emerge.

It’s important to note that this work is in its early stages. What’s underway now is the research to establish what’s possible, not a change members will notice in upcoming applications.

Balancing efficiency, risk and the member experience

That same evidence-based principle already shapes how underwriting operates today, most visibly in the trade-off between speed and risk. While it would be possible to push straight-through processing rates higher than they are now, it would mean accepting risk that we currently and deliberately don’t, as it’s not a trade-off that serves funds or their members well over the long term. The more useful question isn’t how fast a decision can be made, but whether the guidelines behind it remain grounded in evidence and hold up over time.

A machine learning tool currently checks TAL’s underwriting decisions against expected outcomes after the fact, flagging where a decision may not align. The next step is to move that check earlier in the process, so a decision is validated before it reaches the member, with a human still reviewing anything the tool flags.

The same discipline applies to how the team has absorbed growth. Application volumes have grown substantially over the past three years, with some of TAL’s highest-ever monthly submission numbers recorded in 2026. Rather than scaling headcount in step with that growth, improvements to processes and technology have meant each underwriter is now handling significantly more volume than they were three years ago.

This is a genuine efficiency gain, achieved without changing the risk settings that protect members and the broader portfolio, while maintaining service levels.

A capability that keeps evolving

Underwriting at TAL already reflects a deliberate balance of pace, judgement and consistency, and the changes underway build on that rather than replacing it.

Our underwriting enhancements draw on a mix of sources, including member feedback, reinsurer input, and TAL’s own innovation work. The next changes will come as a series of targeted adjustments rather than a single overhaul.

The tension we manage every day is reducing friction for members without weakening the risk settings that protect the long-term sustainability of the portfolio. That’s the balance that adaptive underwriting is designed to improve, with the right evidence gathered earlier to drive informed decisions.