The underwriting process has always been central to insurance operations, but with the rise of new-age technologies, the role of the underwriter is quickly changing. According to KPMG, in the future, “an underwriter will be an integrated profit-and-loss professional who will be assisted by automated, repeatable tasks and analytics-based decision making.”
Insurance companies are increasingly embracing technologies and tools, such as artificial intelligence (AI), business process management (BPM), data analytics, and more, in order to stay ahead of the curve and meet customers’ rising expectations. In this article, we explore the five ways in which new-age technologies can help transform and automate underwriting.
1. Streamlining End-to-end Operations
“In the long term […] insurance leaders are preparing for the post-pandemic world, leveraging cloud, automation, and AI to streamline the underwriting function to enable faster, more accurate underwriting decisions.”
As insurers enter 2021 and look to the future, digitization, automation, and streamlining are some of the concepts coming to the forefront. By effectively leveraging new-age technologies, including AI, BPM, and robotic process automation (RPA), insurance companies can eliminate the need for manual underwriting and pricing activities, offload administrative tasks, and offer greater service and transparency to brokers and customers.
Insurance companies can empower their customers with tools like self-service portals for claim and document submission, contact less transactions, and dashboards for real-time status updates. Simultaneously, intelligent automation can enable underwriters to supervise repetitive tasks and focus on strategic, complex, and risk-laden issues where expert advice is needed.
2. Enabling Smarter Decision Making
Effective underwriting is predicated upon smart decision making and risk management. And so, leveraging technologies, like AI, the internet of things (IoT), and machine learning (ML), is paramount to revolutionizing the underwriting process.
By seamlessly integrating with core insurance systems and third parties, insurers can gather customer data and generate insights on credit history, property ownership, risk assessments, and more. Insurers can also access behavioural data through IoT devices, such as smart wearables and sensors, and identify patterns to improve underwriting predictability and profitability.
Additionally, insurance companies can collaborate across different branches and divisions in real time to centrally monitor and process transactions and ensure that underwriters have access to all the relevant information.
3. Ensuring Anytime, Anywhere Access to Policy Documents
By bridging operational silos and digitizing departmental files and workflows, insurers can easily create, capture, manage, deliver, and archive documents across office locations and remotely. This means that underwriters can quickly search for and access crucial information in just seconds, without compromising on security and compliance.
4. Offering Personalized and Targeted Communications
Customers today expect consistent and customized communication across all touch points. And according to a 2019 study conducted by Accenture, “More than three-quarters of consumers […] are willing to share personal data for benefits, such as personalized offers, more efficient and intuitive services, and more competitive pricing.”
Insurers must leverage APIs and web services to integrate with third-party data sources, and then effectively use analytics and cognitive technologies to discern customers’ sentiments, risk ratings, behaviours, and more. All of this information can be used to effectively engage customers according to their needs and preferences.
5. Growing Customer Loyalty and Trust
As competition becomes more and more fierce within the insurance industry, loyalty and trust will be essential to attracting and retaining customers. And prospectively, underwriting has a significant role to play in building customer loyalty. By allowing underwriters to “provide [customers with] new products and services, driven by real-time data, predictive models, and ongoing risk assessment,” underwriting can become a strategic function that influences customer satisfaction and business success.
The Future of Underwriting
“Underwriting in insurance is essential to performance excellence. Today’s carriers will need to evolve the role to meet the industry and customer needs of tomorrow.”
Given the immense importance of underwriting in the insurance industry, insurers must leverage the correct technologies and systems to reduce costs, improve productivity, and exceed customers’ expectations. In fact, insurers should attempt to optimize their technology investments by adopting a platform-based approach.
A platform can be deployed on the cloud or in a hybrid environment to empower underwriters with continuous, secure, and remote access to the necessary systems and data. Insurers can effectively leverage capabilities, ranging from mobility to analytics, RPA, AI, and more, to bridge operational silos and future-proof their organizations.
Disclaimer: The author of this article is Virender Jeet, Views expressed in this article are his own.
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