3 life insurance underwriting predictions for 2023
As the insurance industry continues to navigate the pace of change, complexity and uncertainty in our world, Consumers continue to respond, and they expect companies to be more responsive to their needs. This year’s underwriting forecasts provide guidance on how carriers can respond faster.
1. Advanced cognitive technologies will help insurance companies seize opportunities from the most unique market segments
Technological advances in artificial intelligence and data analytics are helping insurance companies to further improve their market segments. As these separate segments grow, so does the opportunity for insurers to engage with them through new products and services offered through a wide range of digital distribution channels. One of these channels is Built-in insuranceIncorporating insurance into customer journeys for non-insurance companies – for example, offering life insurance during the process of applying for a mortgage.
new Cognitive insurance platforms Supporting these new products and distribution channels provides life insurers with a way to seize that opportunity, and as these platforms evolve, they hold huge potential for the underwriting function. Already, these insurance platforms are automating evidence gathering and making recommendations based on their constantly updated data analytics engine. With this level of automation and intelligence, underwriting decisions can be made in real time. Those cases that require further scrutiny are automatically referred to a human guarantor. With much of the evidence collection already completed, the human underwriter is free to focus on further analysis, which leads to more efficient decision-making – a clear competitive advantage in fast-moving digital distribution channels. We believe that innovation in this area will continue to evolve over the next year. Indeed, our report Support the future of insurance He describes on page 11 how a life insurance company in China is improving operating efficiency and customer experience by leveraging AI and smart algorithm.
2. Customer experience will continue to drive underwriting innovation
in the last year Underwriting forecastI discussed how customer experience will determine who wins the new business digital competition. We expect this trend to continue, but with greater awareness of consumers’ expectations and how insurers can respond more quickly to their changing needs. For example, we have Accenture Insurance Consumer Study Research It determined that millennial and younger consumers aren’t the only group embracing a digital experience. Group 55 and over are becoming more comfortable with digital interactions. And if insurance companies want to attract and retain customers, digital customer experience is a tabletop experience. The IPO plays a pivotal role in supporting the digital customer experience, particularly with the proliferation of customer experience technologies available through ecosystem partners.
As our industry shifts from compensation to protective products, digital technologies will be essential to providing differentiated experiences that take advantage of these platforms and ecosystems to seize opportunity from new product innovations. We believe that product innovation and underwriting will provide an important source of revenue over the next several years. However, it will require expanded use of AI, automation, data analytics, and the cloud Increase revenue profitably.
As insurers modernize their legacy platforms, freeing up siled data, they are able to automate their underwriting workflows to provide a faster digital purchasing experience, while connecting to additional data sources that help them apply the appropriate level of risk management. Not only does this shorten underwriting timeframes and lower costs, but it also improves the customer (and underwriter) experience. Likewise, it supports the advanced experience that consumers are looking for – seamless, proactive, and personalized.
According to a Gartner® report (Richard Natale, Kimberly Harris-Ferrante, August 2022), “By 2027, digitally engineered underwriting will have reached mainstream adoption in the life insurance industry, driving significant increases in revenue and underwriting profitability and an improved customer experience. ”
3. Human-machine operating models will help alleviate underwriting skills shortages
Digital technologies such as artificial intelligence and automation do not replace underwriting jobs. On the contrary, these technologies will become even more necessary as insurance companies face a constant shortage of skilled workers. Moreover, they will Need a talent and investment strategy targeting digital skills in data analytics and no/low code capabilities along with the use of Flexible workforce to improve underwriting function.
For example, with the increasing use of third party data, Artificial intelligence and automation Provides an efficient way to ingest data and make it useful to underwriters. This frees insurers to do what they do best – valuation and rate risk–While driving at the right time and making effective decisions. What prevents them is the administrative work that it requires 40% of their timeaccording to our data A survey of 500 life insurance companies in the United States.
The first step is to improve the efficiency of back-end underwriting processes. compatibility It is the key to simplifying all customer-facing functions including product distribution, marketing, sales, service and commerce as well as using an integrated technology stack across platforms and ecosystems. The knowledge platforms described above can also help here. As insurers improve their digital capabilities to meet ever-changing consumer needs with more insurance products and separate distribution channels, underwriting capacity will have to keep up. This combination of man and machine can facilitate a better experience for potential underwriters and policyholders.
This is good news for the insurance value chain and reinforces my optimism about our industry and insurance companies’ capabilities to meet the challenges and opportunities that lie ahead. We are ready to help. Let’s talk About making the most of technology and human ingenuity.
Powering the future of insurance: Modernizing technology, such as artificial intelligence and cloud-powered data analytics, helps insurers achieve profitable growth by increasing revenues and reducing costs.
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