Current technology trends in underwriting

Data comes from many diverse sources. From country to country, it's quite different. And many carriers now use data in novel ways to do things like develop predictive models and identify data patterns that can be applied to certain groups of people. As a result, the underwriting experience is shortened and the process of getting life insurance is much easier.

Insurance companies are also going a step further, developing artificial intelligence (AI) models and that's making it easier and faster to make decisions as it requires less information from the applicant. So, what we're seeing is a trend where much of the information is coming from third-party data sources compared to historically when most of the information would have come from the applicant.

Into the future, we’ll see less and less information coming from the applicant and more of it automatically feeding into the decision-making process from third-party data sources and AI technology. So, it's important that life insurers think about data as an asset, which is something that they must manage very carefully.

They're custodians of their own data and they need to make sure they manage it because it is something that they'll use increasingly over the coming years. 

The second growing trend is around understanding your customer and engaging them. Life insurance carriers really need to deploy technology to help them do this well. And engaging customers through the digital experience is the first step.

Being able to observe, measure and understand the behaviours of customers through their digital journey is now critical throughout the process of buying life insurance. 

There is a lot of great technology available today to support the science of user experience and behavioural analytics, and insurers are increasingly adopting and deploying these sciences into the process of offering products to their consumers. And this trend will only grow.

The third area is around cloud and SaaS operating models. Life insurers are taking advantage of the SaaS operating model that insurtech's have championed so they can try out different technologies before they buy.

They can switch on or off and switch technologies easily and leave the complexity of managing the technology to the insurtech. This allows them to focus on their core business, which is developing the products they need for their market and making sure they get the best underwriting and pricing models in place.

The advantage of the SaaS operating model is that it brings down costs because operators are sharing the cost of the solution with many other subscribers. This means that life insurers can avail of a cost advantage by using SaaS cloud solutions compared to, in the past, having single on-premise offerings which are more costly to manage.

There are the major tech trends currently playing out in the insurance space: development data and predictive modelling; customer engagement and behavioural analytics; and taking advantage of SaaS solutions, its cost advantages and how it frees up insurers to focus on their core business. 

Together these trends are changing the face of insurance and it’s up to insurers how they engage with them. What is clear is that progressive insurers will view these trends as opportunities.