The global changes brought about by Covid 19 have increased the consumer needs for protection products and accelerated the insurance industry’s desire for digital transformation, from the enablement of remote working to deploying bots to drive cost and efficiencies.

Technology has been on the march in many facets of processing, but underwriting lags behind in certain areas that are still paper-based. This means that important digital analytics on underwriting efficiency simply don’t exist in any comprehensive manner.

There are whole areas of data that should be being captured and processed in order to make life insurance businesses more efficient, profitable, and enable faster referrals and client triage. This, in turn, is valuable for advisers and customers, as the whole process becomes slicker, faster, and more accurate.

When Digital Goes Analogue

UK life insurers arguably lead the world in online risk assessment, with around 70% of the two million individual new protection policies put on risk last year, receiving underwriting decisions within minutes after completing an interactive online application. However, the remaining 30%, around 600,000 applications, are more complicated and require the intervention of an underwriter and additional supporting information in many instances.

Despite the best efforts of the underwriting community and medical service providers, these applications are ejected from a slick digital process into a manual process that can grind to a crawl, frustrating advisers and their clients.

Mark Dennison at protection adviser LightBlueUK says this is a problem when advisers are selecting the best provider for their client: “It can be frustrating when an adviser does really good work on the factfind and designing a bespoke plan for a client only to see the whole process grind to a halt once it enters the web of underwriting. It’s not necessarily the insurer’s fault but the client simply becomes frustrated and so does the adviser. The ability of the insurer in this area is something we have to bear in mind. In 2020 there should be smarter ways of building underwriting platforms to make it all work more efficiently.”

Improving the Process

The underwriter has access to suppliers of screening, telephone and medical data services who are all deploying smart technology, meaning a human must manage a multi-disciplinary process.

To do this, insurers need to develop technology that both automates the many manual processes and, most importantly, embed all underwriting data into a digital format to assist the underwriter with data visualisation, redaction of medical reports, predictive assessments of potential cost and underwriting outcomes, while providing higher levels of transparency to meet growing levels of customer and regulator demand.

The solution is a digital underwriting portal, which captures and integrates internal insurer data with external data provided by third-party screening, testing and medical record capturing providers onto one portal.

A digital underwriting portal will not remove the need to seek critical supporting evidence, but it will transform this manual part of the risk assessment process into an equally slick digital experience by:

  • Automating and speeding up back and forth activities, leaving the underwriter to focus on decision making, not paper chasing
  • Providing real-time online case tracking for IFA and customers, capturing and tracking the speed at which an insurer or medical services provider can turn around every application
  • Supplying the insurer and IFA with live matrices to measure and optimise the cost, speed, transparency and outcome of every application

In summary, a digital underwriting portal captures data across the entire referral process, and can analyse data relating to real-time performance by products, distributors, and insurers.

Over time, the digital underwriting portal will triage and predict underwriting outcomes to assist the human underwriters in improving transparency, consistency, speed and cost, leaving the final decisions for underwriting complex applications to the underwriter.

For insures who adopt such technology, the outcome is likely to be shorter processing times, underpinned by automated IFA and customer communications that in turn will drive higher customer satisfaction ratings for the IFA, and higher Net Promoter Scores for insurers with less applicants falling out of the process.

 

Author:

Guy Williams
Director, Sales and Marketing

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