As technology continues to touch every aspect of life and business, how well is the insurance industry doing in adopting technology to reshape its operations and move towards greater levels of efficiencies?
It is undeniable that technology will continue to have massive impacts across all aspects of the insurance value chain as it evolves – from product development and underwriting to distribution, claims and services. A good example of how technology can transform an insurer’s business is in the role it played in a global life insurer’s long-term digital transformation plan.
UnderwriteMe, a wholly-owned technology subsidiary of Pacific Life Re, was engaged by a global life insurer to partner with them in realising their long-term digital transformation plan. The insurer wanted an innovative, technology-driven approach to underwriting large volumes of business, which would later prove to be beneficial to their stakeholders across the value chain.
As a specialist insurance technology provider, UnderwriteMe’s Underwriting Rules Engine was selected. This digital platform was to be fully integrated within the insurer’s existing ecosystem, giving their underwriters full control.
Ripple effects felt across the business
Since the launch of the rules engine, the application journey through underwriting has been made much simpler, better and faster. The implementation meant that underwriters could control the rules without having to rely on significant IT involvement.
The insurer also experienced marked improvements in the straight through processing rate, resulting in efficiency gains and a reduction in turnaround times. Following the completion of the digital transformation plan, the data shows that agents, underwriters, customers and the business have all experienced tremendous benefits:
- Due to the instant underwriting decisions the platform provides, agents are now able to convert over 75% of their applications into a sale immediately, where these cases were previously subjected to underwriting reviews. In addition, over 50% of all applications completed their underwriting assessments within 15 minutes. The increase in immediate underwriting decisions and reduction in the time taken to complete an application gave agents the opportunity to engage more with their customer and less on performing administrative tasks.
- With over 75% of these cases accepted on standard terms at point-of-sale, underwriters have been able to save up to 10 minutes of their review time. Digital underwriting does not equate to human-free underwriting. If anything, this significant time reduction allows the underwriters to fully utilise their skills and expertise on focusing on the more complex cases.
- In addition to spending less than 15 minutes for an application, customers are exposed to a frictionless application process where only dynamic, reflexive questions are asked. This streamlined approach resulted in a much smoother, simpler and faster digital journey for them when purchasing life insurance. Whenever the policy application passes through UnderwriteMe’s digital underwriting engine, customers are able to receive a copy of their electronic policy contract in under two hours, down from a turnaround time of two days.
- The insurer gained greater insights into its performance and book of business through the data available from UnderwriteMe’s business analytics module. The insurer was able to use these insights to assess and implement further improvements to its business strategically.
A platform for the future
The ongoing pandemic has made people more technology-conscious and increasingly aware of how technology can improve their lives through speed and ease-of-use. It is a given that underwriting technology should be making processes faster and more efficient. However, in order truly to stand out from the crowd, flexibility in accommodating to the changing demands of the business and new forms of risks are crucial.
With the experiences and learnings accumulated throughout its multiple implementations picked up in recent years, UnderwriteMe is continuing to invest in underwriting automation to improve the customer, agent and underwriter experiences in a rapidly changing environment further.
To keep up with the population’s wide range of social, economic and health influences, UnderwriteMe will continue to create a more personalised experience for the customer by further refining its tailored questionnaire which takes into consideration the different products and risk profiles. Ensuring that the questions asked are as relevant as possible is crucial in delivering improvements in the customer journey and catering for the insurer’s understanding of risk.
Secondly, with the insurance industry inundated with data from various sources and devices, it is crucial to understand how all this data interacts to derive insights about the insurer’s customer base. There are mechanisms available to collect and store data at the most granular level, however, UnderwriteMe will continuously improve on its analytics capabilities to harness the power of ever-increasing data collected through the engine to drive detailed and actionable insights into the future.
In a world full of tech disruptions, it is crucial for insurers to adopt an always-on, digital mind-set that touches upon all aspects of its business. A well-developed digital transformation plan will allow insurers not only to stay afloat, but to meet the rising expectations of its stakeholders, eventually stabilising industry growth. A