Insuranceciooutlook

2020: A Crucial Year for Insurance Underwriters

Insurance CIO Outlook | Monday, November 02, 2020

The underwriting process shifting left starts right after an electronic application is submitted. Sophisticated rules engines and intelligent automation instigate the process of evidence collection.

FREMONT, CA: 2020 has been a crucial year for life insurance underwriters. More insurers have chosen to modernize their policy administration systems and businesses with the purpose of getting greater flexibility and creating exceptional products. When integrated with powerful underwriting rules engines, these new systems can automate a major portion of the underwriting process without requiring human assistance.

Let us get some ideas about the future of insurance underwriting:

Underwriting is Moving to the “Shift Left”

The practice of “Shift Left” is quite significant in software development as it moves process tasks to earlier in the process in order to improve quality and streamline the process. The underwriting process shifting left starts right after an electronic application is submitted. Sophisticated rules engines and intelligent automation instigate the process of evidence collection. When combined with an increasing list of third-party-data sources, like electronic health and medical records, a big chunk of the underwriting process can be accomplished without human interference. In the case of lower face-value policies, this shift left allows insurers to process many applications utilizing straight-through processing (STP) and deliver a decision within minutes. Another significant benefit is that the consistency and quality of underwriting is as good as human underwriting, allowing valuable human underwriters to concentrate on higher face-value policies that need conventional evidence. As technology advancements continue with machine learning, artificial intelligence (AI), and integration with new electronic sources of evidence, it is expected the rest of 2020 would witness an accelerated adoption of these technologies and data sources.

Blockchain and Distributed Ledger Technology (DLT)

Though insurance underwriters have been comparatively slower to utilize blockchain, 2020 saw a huge improvement from the previous situation. This year the life insurance sector boomed on three factors that include improving software platforms behind DLT solutions, carriers looking to DLT as a means to increase efficiency, and the growing utilization of partnerships and ecosystems across the industry gives an opportunity to unleash the value of DLT. People see a massive increase in digital platforms and the heavily regulated data exchange, much of which is utilized in the evidence-gathering phase of the underwriting process.

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