Identifying deaths has become harder for insurance companies.
In 2011, a change to the SSA Death Master File (DMF) fundamentally altered the Death Audit landscape resulting in challenges to Death Audit providers accompanied by a significantly increased burden placed on insurance companies to accurately identify deaths of policyholders. Because of this, missed deaths are leading to overpayments for insurance companies in their Pension Risk Transfer (PRT) and Structured Settlements lines of business. In Long Term Care (LTC), missed decedents are causing companies unnecessary and significant reserves, fraud, and several other issues.
Before the DMF change, comprehensive death audit results were cheap, easy-to-obtain and there was little differentiation between Death Audit providers. The DMF change left Death Audit and locate service providers scrambling for supplemental sources to fill the data gap and required them to develop more extensive algorithms to assign probabilities to the likelihood of a match based on a range of personally identifiable information (PII) that is neither as accurate nor consistent as a single standardized identifier like a social security number.
As a result, Death Audit providers deliver social security number matches where possible (according to PBI analyses, the DMF only covers 16% of deaths); but, often, Death Audit providers are delivering results in the form of high/medium/low likelihoods of death matches. In other words, death data – guesses as to whether there are death matches, not a validated death audit!
Given that Death Audit providers are often delivering Death Data assumptions instead of absolute matches, Death Audit customers have been forced to come up with their own processes to wade through the “guesses” and determine which policyholders of their populations are deceased, i.e., to create their own Death Audit. Essentially, insurance companies are simply paying for incomplete data and end up doing most of the work required to validate all decedents in their population.
The additional death verification work can be significant and, insurance companies have taken different approaches. Some will only review/validate high probability matches. Others have invested in resources to review high/medium probability matches; but those resources aren’t often fully dedicated to the task of death data verification and the process can be slow and costly. Plus, the added burden of data review coupled with differing manual processes has resulted in inconsistent death match identification and a significant number of missed deaths.
Why is a validated death audit so important?
Accurate and timely discovery of policyholder deaths on the annuity side of life insurance can save millions in overpayments and can also help fulfill the company’s fiduciary and compliance obligations to quickly find policyholder beneficiaries.
Based on assessing thousands of customer population sets, PBI saw this issue of missed deaths manifest and accelerate over the past several years. As a result, PBI invested millions of dollars in developing CertiDeath, the only true Death Audit product that delivers a full set of validated deaths and not Death Data comprised of some validated deaths plus “guesses”. CertiDeath, identifies 96.5% of deaths with 99.9% accuracy. How? CertiDeath uses proprietary algorithms, the largest and most comprehensive obituary database, and the greatest team of experts in the industry. CertiDeath has helped organizations uncover over $1 billion in overpayments, releasing billions in unnecessary funding liability, helped meet regulatory obligations, and ensured participants, policyholders, and beneficiaries have received what they’ve earned. Since it’s launch in 2019, CertiDeath has become the most successful new Death Audit product with hundreds of customers representing over 20,000,000 records.
To learn more about the value of CertiDeath and get a no-cost assessment of missed deaths in your population, please contact us.
