Outdated life and health insurance underwriting process—an inconspicuous productivity blocker
- Published
- 4 min reading
According to Insurtech Insights, one of the main goals for insurers for 2023 will be to develop a fully automated and data-driven insurance underwriting process. The underwriting process in life and health insurance is a large and often crucial part of the sales path in these business lines, and any occurring problems can be a blocker for their development. Slow, poorly digitized life and health insurance underwriting processes limit or even prevent insurers from achieving many of their goals, including strategic ones. These include:
- unique customer experiences and higher sales,
- filling all strategic workplaces,
- improvement of work efficiency of the entire company,
- better understanding customer needs and building new sales channels.
Unique customer experiences and higher sales
Legacy, i.e. outdated systems of insurers, limit the achievement of exceptional customer experience and comfortable work for the agent. While processes are expected to be fast and self-service, the use of obsolete life and health insurance underwriting systems is often still associated with manual work, using paper applications, taking weeks to analyze, and even longer to bill. Nowadays, time is of the essence for everyone, which is confirmed by countless studies showing ever lower values in time meters that agents—and even more so customers—are able to endure while waiting for a product or service. Meanwhile, modern life and health insurance underwriting systems allow for underwriting proposals in to be made real-time.
Faster life and health insurance underwriting processes mean more sales. When a policyholder cares about time, because, e.g. having a life insurance policy determines the conclusion of a loan agreement, there is a high probability that they will sign it with the insurer whose proposal will be processed the fastest. You can become the fastest on the market in just a few months thanks to ready-made life and health insurance underwriting systems provided by experienced and specialized IT companies.
Filling all strategic workplaces
Currently, most insurers complain about the lack of qualified staff, also in underwriting in life and health insurance. The effects of this can be limited by digitizing and automating many processes. For example, artificial intelligence (AI) speeds up data analysis, facilitates decision-making, or captures fraud events. New technologies support the work of underwriters on one condition: when their systems are open to and compatible with new technologies. It is worth recalling here that if it is necessary to replace the existing systems, it is not necessary to immediately invest in the purchase of a whole new sales system. You can start your modernization of the underwriting process in life and health insurance with a single selected module and gradually replace subsequent elements.
Improving the work efficiency of the entire company
According to Insurtech Insights, administrative work can take up to 40% of an underwriter's time. Hence, investing in the modernization of underwriting process in life and health insurance may not only increase its efficiency but also give the opportunity to measure it. Digitization of proposals – including their verification, auto-complete, and queuing according to business rules – makes it possible to speed up the evaluation and reduce the risk of human error or fraud attempts. As data floods the insurance industry, technology is there to harness and manage it, starting with modern life and health insurance underwriting systems.
Modernization of one area in the company usually determines changes in others. Reducing errors and fraud attempts resulting from the implementation of the life and health insurance underwriting module can reduce the amount of work in the departments of complaints, settlements, claims handling, or security. An experienced IT provider will propose the best solutions in advance and plan work in such a way that the effects of the phases are implemented even within a few weeks, before the entire project of implementing the life and health insurance underwriting process is completed.
Better understanding customer needs and building new sales channels
A more in-depth data analysis means a better understanding of customer needs, that is the main component of a tailor-made product. In addition to the need for support in the form of new technologies (AI, IoT, etc.) and their compatibility with the life and health insurance underwriting system, the way data are presented and available is also important. This is a key and verifiable issue even before concluding a contract with an IT supplier, because many have demo versions of their solutions.
Investments in new technologies affect the development of underwriting in life and health insurance, for example by creating new sales channels (e.g. embedded insurance), establishing partnerships, etc. What matters is creating a new and unique value for the client. Among the product strategies, there is one that is based on building product profitability, e.g. through increased sales of additional services like assistance. It is therefore important that legacy should not limit the chances of increasing turnover. This problem has become practically unheard of in the case of the new generation of life and health insurance underwriting systems.
Time is money
The sooner insurers decide to modernize underwriting software in life and health insurance, the sooner they find out about its positive effects. Faster processing (e.g. customer service) means more customers, higher profits, the satisfaction of customers, employees, and agents, etc. It is an opportunity to achieve strategic goals, e.g. being the first on the market. We already have such successes in our portfolio. Let's start the conversation with that.
Product Marketing Manager at Comarch
