Data-driven underwriting underpins profitable new life insurance business. With data’s ability to drive bottom line performance, it’s no surprise that one of the three predictions for 2018 and beyond includes data insights. And they’re a powerful force in driving top line performance and expanding new opportunity in discrete markets that once were untenable, such as the $12 billion consumer middle market
Data is a foundational element of any underwriting technology. The extent to which you can easily access and integrate data determines the profitability of your underwriting. Integration speed and simplicity then assume even greater significance as devices proliferate and insurance ecosystems expand beyond traditional business systems. The growing sources of data represent opportunity to capture even more data insights that fuel the new products consumers need, when and where they want them, and at a price that delivers value. This is the future of digital insurance, and it’s here now.
Are you prepared to lead in the new data-driven insurance industry?
Kym Gully, ALIP engineering and technology lead, explains in a recent article published in LOMA Resource, three underwriting predictions that life and annuity insurers should consider when developing your business and technology strategy. We hope you find it helpful driving profitable new business for your organization.
3 Insurance Underwriting Predictions for 2018 and Beyond
By Kym Gully, product strategy and development
Accenture Life Insurance and Annuity Platform (ALIP)
1. The $12 billion middle market will become a profitable opportunity for the digital insurer.
The digital, middle-market consumer and the direct-to-consumer (D2C) model represent tremendous opportunity for digital insurers that can quickly develop products and provide more choices that cater to discrete populations. But here’s the challenge. Digital consumers expect a seamless approach to get to know them, anticipate their changing needs and adapt products to meet them. They hate paperwork and expect to complete the entire process in a seamlessly delightful online experience from their mobile devices.
What does that mean for underwriters? Automate! Combine rules-based, configurable underwriting processes using BMI and lifestyle data accessible from social media to enable no-touch underwriting and instant issue. Determine the rules once, and apply analytics to review sales over claims and continuously fine tune the rules to drive greater profit.
2. Data will become even more significant… especially to the extent you’re not using it.
Data and access to it through APIs is key. We expect it to grow as the data boundary expands beyond underwriting vendors to connected technologies such as wearables, bots and digital assistants. Monolithic legacy systems—and some modern systems that lack robust SOA-based API strategies, business processes and operational frameworks—will be unable to compete with the speed and agility required.
Businesses, ditch your spreadsheets! Use core application data and automation to drive business results. Place more emphasis on pre-built APIs, unified processes and development components that can be catalogued and re-used across products. APIs unlock ecosystem and legacy data to deliver digital capabilities at pace while continuing to deliver on traditional IT commitments.
3. Underwriters will not be replaced by AI and Chatbots … not yet.
“Hey Google, find a term life insurance policy at a good price.” AI coupled with data insights has great potential in the life and annuity industry. Imagine the power of social media and devices to deliver more personalized experiences beyond issuance, claims or payouts.
Underwriters, instead of seeking data, it will come to you with a comprehensive risk profile—fewer exceptions and manual underwriting. But first, remove the free-form text fields. Instead, use reflexive questions with drop down fields and radio buttons that deliver binary data. That’s what AI needs to automatically learn, calculate and perpetually fine tune underwriting rules. The promise of AI complements underwriters, especially those with a robust technology platform and strategy.
Leading insurers embrace digital underwriting and invest in technology that meets customer needs while driving profitable underwriting. Learn how Accenture Life and Annuity Platform (ALIP) can help.