Digital Underwriting
Third-Party Data Blog

When you finance a car, they instantly check a couple of data sources like credit score and you are instantly given an underwriting decision.  This same experience of getting an instant underwriting decision in the life insurance application process is now possible. This is being enabled because of automation underwriting, third-party data, and predictive models. This new age in insurance underwriting, and digital online application experience has never been quicker.

Now more than ever, everyone is avoiding physical contact, making in-person testing and analysis more difficult than usual, and data collection for life insurance underwriting more challenging. This issue is accelerating the need for digital solutions and access to medical data through integrated data.

Using third-party data is not a new concept for insurance, but how it’s being integrated into the process makes all the difference. It used to be that if you wanted to apply for life insurance, the process to get approved could take weeks, even months. First, you would have to fill out the application. Insurance underwriters would then go through each piece of information provided and verify it manually. Upon finding any inconsistencies, the insurance underwriters would need to track down a field agent, who would find you to ask clarifying questions about the inconsistencies, and then relay that information back to the insurance underwriters. This process could sometimes take days, or even weeks, and hundreds of hours of manpower.

With the advent of integrated third-party data, that process can now happen almost instantaneously. As the applicant goes through the underwriting process, the information is checked against third-party data that is already integrated seamlessly. Data such as DMV records, prescriptions, medical history, and any other custom sources the insurer wants to integrate can be used to verify the information provided by the applicant immediately, cutting out the need to manually verify each piece of information. This data is fully integrated into the system as well, allowing for real-time updates on the data being used for underwriting. As a result, the underwriting process could take a matter of hours, rather than weeks.

This immediate verification system creates a ripple effect throughout the entire underwriting and approval process, providing the applicant with a truly digital experience – something people are looking for now more than ever. This type of ‘fast data’ expedites the process and save everyone time and money in processing the application.

Using these automated underwriting processes isn’t just beneficial from a cost-cutting perspective – it’s an improvement on the customer experience as well, where the applicants can now go through the process much more quickly, and get the information they need to find the coverage they want.

We’re already at the new frontier. Models are being created to give applicants predictive scoring to create real-time automated underwriting systems, also known as augmented underwriting. Inconsistencies are being caught immediately, allowing for real-time clarifying questions. Underwriting risk is being minimized at every step, and predictive analytics in insurance are taking off like never before. Gone are the days of manual underwriting – underwriting operations have gone digital.