As the insurance industry continues to respond to the pace of change, complexity and uncertainty in the world, Consumers continue to respond and expect companies to better meet their needs. This year’s underwriting forecast provides guidance on how carriers can respond more quickly.
1. Evolving cognitive technologies will help insurers seize opportunities from more discrete market segments
Technological advances in artificial intelligence and data analytics are helping insurance companies further refine market segments. As these more discrete segments grow, so do the opportunities for insurers to serve them with new products and services through broader digital distribution channels. One such channel is embedded insurance– Place insurance within the non-insurer customer journey – for example, offering life insurance during the mortgage application process.
new Cognitive insurance platform Underpinning these new products and distribution channels provides life underwriters with the means to seize this opportunity, and as these platforms evolve, they have significant potential for underwriting capabilities. These insurance platforms are already automatically collecting evidence and providing recommendations based on continuously updated data analysis engines. With this level of automation and intelligence, underwriting decisions can be made in real time. Those cases that require further review are automatically forwarded to human underwriters. With much of the evidence gathering now complete, underwriters can focus on further analysis to make more efficient decisions – a clear competitive advantage in rapidly evolving digital distribution channels. We believe innovation in this space will continue to develop over the next year. In fact, our report Driving the future of insurance Page 11 describes how a Chinese life insurance company uses artificial intelligence and smart algorithms to improve operational efficiency and customer experience.
2. Customer experience will continue to drive underwriting innovation
in last year’s Underwriting ForecastI discuss how customer experience will determine who wins in the digital race for new business. We expect this trend to continue, but with increased awareness of consumer expectations and how insurers can respond more quickly to their changing needs. For example, our Accenture Insurance Consumer Study Millennials and younger consumers are not the only ones embracing digital experiences. People aged 55 and older are increasingly comfortable with digital interactions. If insurance companies are to attract and retain customers, digital customer experience is table stakes. Underwriting plays a key role in supporting digital customer experiences, especially with the proliferation of customer experience technologies provided by ecosystem partners.
As our industry shifts from compensation to protection products, digital technologies will be critical to delivering differentiated experiences that leverage these platforms and ecosystems to capture opportunities from new product innovation. We believe product and underwriting innovation will provide important revenue streams in the coming years. However, this will require expanded use of artificial intelligence, automation, data analytics and the cloud, Profitably drive revenue.
As insurance companies modernize their legacy core systems and free up siled data, they are able to automate their underwriting workflows to deliver a faster digital buying experience while connecting to other data sources to help them apply the appropriate level of risk management. Not only does this shorten underwriting time and reduce costs, it also improves the customer (and underwriter) experience. Likewise, it supports the advanced experiences consumers seek—seamless, proactive, and personalized.
According to a Gartner® report (Richard Natale, Kimberly Harris-Ferrante, August 2022), “Digital underwriting will achieve mainstream adoption in the life insurance industry by 2027, significantly increasing revenue and underwriting profitability, and improving the customer experience.”
3. The human + machine operating model will help alleviate the underwriting skills shortage
Digital technologies such as artificial intelligence and automation will not replace underwriting jobs. Instead, these technologies will become even more necessary as insurance companies face ongoing skilled labor shortages. Moreover, they will Requires digital skills targeting data analytics and no/low code capabilities and usage Flexible workforce to optimize underwriting functions.
For example, with the increasing use of third-party data, Artificial Intelligence and Automation Provide an efficient way to capture data and make it useful to underwriters. This leaves underwriters free to do what they do best – assess and price risk—while promoting timely and effective decision-making. What’s stopping them is occupied administrative work 40% of the timeaccording to our Survey of 500 U.S. life insurance underwriters.
The first step is to improve the efficiency of back-end underwriting operations. interoperability In addition to using an integrated technology stack across platforms and ecosystems, this is key to streamlining all customer-facing functions, including product distribution, marketing, sales, service, and commerce. The cognitive platforms mentioned above can also help. As insurance companies increase their digital capabilities to quickly meet consumers’ changing needs through more discrete insurance products and distribution channels, underwriting capabilities must keep pace. This integration of humans and machines can provide a better experience for both underwriters and potential policyholders.
This is great news for the insurance value chain and further reinforces my optimism about our industry and insurers’ ability to respond to future challenges and opportunities. We’re ready to help. let’s talk Take advantage of your technology and human ingenuity.
Driving the future of insurance: Modernizing technologies like artificial intelligence and cloud-driven data analytics can help insurers achieve profitable growth by increasing revenue and cutting costs.
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