Understanding Current Technology Trends in Underwriting

A variety of technology trends are presently on the rise. A notable trend involves the application of data. This article delves into the current technology trends in underwriting.

Fremont, CA: Numerous technology trends are currently gaining momentum. One significant trend pertains to the utilization of data. Historically, in life insurance, information was primarily derived from the applicant's assessment before making an underwriting decision. However, there is a growing tendency among insurance companies and underwriters to leverage third-party data to verify information, ensuring that they arrive at the most accurate risk assessment.

Data:

Data is sourced from various origins, varying significantly from one country to another. Many carriers are leveraging data innovatively, such as creating predictive models and identifying patterns associated with specific demographics. Consequently, the underwriting process has been expedited, making acquiring life insurance more straightforward.

Furthermore, insurance companies are advancing their efforts by developing artificial intelligence (AI) models, which facilitate quicker and more efficient decision-making by requiring less information from applicants. This shift indicates a growing trend where a substantial portion of the information is derived from third-party data sources, in contrast to the past when the majority of data was provided directly by the applicants.

In the future, we can anticipate a decline in the amount of information applicants provide, with a greater reliance on automated data integration from third-party sources and artificial intelligence in decision-making. Consequently, life insurers must regard data as a valuable asset that requires meticulous management. As stewards of their data, insurers must ensure its careful handling, as it will become increasingly essential in the years ahead.

Customer Engagement:

The second emerging trend focuses on comprehending and engaging with customers. Life insurance providers must leverage technology to enhance their capabilities in this area. Engaging customers through a digital platform represents the initial step in this process. It is essential to monitor, assess, and interpret customer behaviors during their digital journey when purchasing life insurance.

A wealth of advanced technology exists today to facilitate the study of user experience and behavioral analytics. Insurers are progressively integrating these methodologies into their product offerings for consumers. This trend is likely to continue on an upward trajectory.

Software-As-A-Service (SaaS) and Cloud Models:

The third focus is cloud and Software as a Service (SaaS) operating models. Life insurance companies are leveraging the SaaS model, promoted by insurtech firms, to experiment with various technologies before making a purchase decision.

This model enables them to quickly activate or deactivate technologies and entrust the complexities of technology management to the insurtech providers. Consequently, life insurers can concentrate on their primary business objectives, which include developing necessary products for their target market and ensuring the implementation of optimal underwriting and pricing strategies.

One of the key benefits of the SaaS operating model is its cost-effectiveness, as users share the expenses of the solution with numerous other subscribers. This allows life insurers to benefit from reduced costs by utilizing SaaS cloud solutions, in contrast to the previous reliance on single, on-premise systems that were more expensive to maintain.