Can Underwriting Technology Help Insurance Companies Meet Consumer Expectations?

By Jesse Gospodarek

While the insurance industry has frequently been labeled a “laggard,” according to a 2021 Insurance Business article, it wasn’t always that way. Life insurance companies were early adopters of mainframe technology in the 1950s, using emerging applications to facilitate actuarial work and premium billing.

In fact, early adoption is part of the problem. Many established insurance providers invested heavily in insurance innovation in the past. Today, they’re mired in legacy that makes accelerated digital adoption difficult. However, to meet the expectations of tech-loving consumers, insurance companies must improve transparency, personalization and ease of use or risk losing market shares to lean startups offering more user-friendly insurance options.

How does underwriting technology help insurance companies meet consumer expectations?

Consumers expect transparency in the underwriting process.

Customized underwriting platforms allow policyholders to review their insurance portfolio, file claims and receive policy updates at any time, providing a greater sense of control and transparency which consumers have come to expect.

Consumers expect personalized insurance products.

Underwriting technology uses data enrichment and advanced analytics to provide personalized coverage recommendations, advice on reducing risk and more. Artificial intelligence and machine learning equip insurance companies to deliver one-to-one personalization for each customer, a feat that would be impossible using traditional insurance underwriting processes.

Consumers expect ease of use when researching and selecting insurance products.

Traditionally slow painful payment and claims processes take place with a few clicks when automated, and insightful AI guidance simplifies decision making for consumers who just want to buy insurance and get back to their Doritos and Netflix.

Consumers expect help from a human when the chips are down.

One of the chief advantages of a customized underwriting platform is the new freedom it gives formerly bogged down underwriters to respond to customers when things get complicated. Upskilled agents have the capacity to leverage both human intelligence and AI to create value for customers and ensure more attractive returns for stakeholders.

Close the gap between customer expectations and insurance offerings, and win in the insurance marketplace.

Across the insurance realm, the implications of a world bent on immediacy, cost-efficiency and convenience are already clear. Insurers leverage more complex data sets to refine their practices. Data collected by vehicles about driving habits could be used alongside driving records to set rates in the future.

Imagine the possible implications of big-data sharing on health insurance rates. Could purchases deemed “unhealthy,” such as alcohol and cigarettes, be used to justify higher health premiums? Could buying a chainsaw on a credit card immediately impact your risk rating for homeowners insurance liability considerations? Sounds Orwellian, although perhaps not too far off. Suffice it to say, insurance companies will continue to leverage whatever data they can.

Likewise, insurance customers use the same data structures to inform their insurance purchases. It’s never been easier for consumers to build insurance portfolios tailored to their wants and needs. Compare providers and compare plans while deciding if the app or system will work the way you need it to. But all the data-driven advantages and discounts in the world mean very little when the customer does not have confidence in the platform they run on.

Automation In Underwriting: It’s Here To Stay

Within the world of insurance underwriting, automation improves carriers’ overall workflow by achieving greater speed and efficiency, adapting to changing business needs, reducing human error, and improving team roles, responsibilities and overall company production.

Embrace the automation disruption.

A good place to start your plan to embrace the automation disruption is in commercial underwriting. We’ve created four simple steps insurers can take to put automation to work:

Benchmark where you are within the areas of underwriting. Can you use improvements, and do you want to save time, money, and resources? If you answered “yes” to any of these, determine what issues can be solved through automated underwriting solutions.

Educate your teams, and have each role (underwriters, managers, and product managers) identify areas that can be automated.

Communicate out the plan so everyone is on the same page.

Contact an experienced technology provider for a consultation on solutions to your automation needs.

Don’t get left behind. Automation is here to stay, so implement a strategy soon to advance automation right now.

Jesse Gospodarek is an independent sales and marketing consultant with Management Research Services, Milwaukee. He may be contacted at [email protected].