Other parts of this series:
- Evolving insurance ecosystem requires overhaul of underwriting function
- Solution-oriented products, market awareness two key traits of digital underwriters
- Technology, analytics will play critical role in underwriting for digital underwriters
- Cost-efficiencies, channel-intimate approach vital for carriers evolving into digital underwriters
- The digital underwriter: How underwriting leaders must evolve; and quickly starting your organization’s evolution
The entire insurance ecosystem is in a state of evolution. Disruptive new competitors and technologies are changing existing customer markets and customer expectations; analytics and data technologies are creating both opportunities and risks relating to competitive services and adverse selection; insurance products are transitioning from pure risk protection to risk management services; and distribution channels are consolidating even as new digital channels emerge.
The numbers tell the story. According to Accenture research:
- 52% of insurance customers would consider purchasing insurance products from organizations other than insurers.
- 84% of insurers feel that digitalization is changing customer expectations.
- 80% of insurers believe that new technologies will radically change their traditional practices.
- 61% of insurers have added or are considering adding a range of non-insurance products in an effort to develop customer intimacy and ultimately position themselves as lifestyle partners.
- 72% of insurers agree that digital technologies will transform how they use their channels.
To remain competitive as technology transforms the insurance industry, carriers will have to evolve. A key function that carriers will have to rethink during their evolution is underwriting. As I note in the Accenture report, Insurance strategy: Evolving into a digital underwriter, 90 percent of carriers are either currently investing in their underwriting functions or plan to over the next three years.
This is a positive response to the forces that are creating and shaping a digital insurance ecosytem. But are carriers making the right investments that will transform them into digital underwriters with the traits they will need to be successful in this new world?
Digital underwriters must:
- Offer solution-oriented products.
- Have heightened market awareness.
- Develop technology-enabled underwriting capabilities.
- Adopt analytically-enabled services.
- Implement cost-efficiencies.
- Take channel-intimate approaches.
- Be nimble.
Only by making the investments needed to establish all of those traits will underwriting organizations will be able to drive cost-effective, profitable growth.
In this series of posts, I’ll examine all of those traits. I’ll also offer some tips on how carriers can get started quickly on transforming into digital underwriters.
Next time: Solution-oriented products and market awareness.
To learn more in the meantime, download this report: Evolving into a digital underwriter