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How to Rewrite the Rules of Underwriting in Life Insurance?

Insurance CIO Outlook | Tuesday, September 14, 2021

Accelerated underwriting is a new and enhanced simplified issue that allows insurers to analyze risk more quickly and precisely. It necessitates that life insurers incorporate a wide range of data into the underwriting process, including data from both traditional and non-traditional sources (MIB, Rx databases, and MVR).

Fremont, CA: Customers are increasingly expecting insurers to give individualized products, services, and experiences on par with what they get elsewhere in life and online. In fact, according to a recent survey, 20 percent of customers stated that a lack of personalization in their plans was the key reason they left their insurer. As client expectations rise, insurers, particularly their underwriting teams, are being forced to adapt.

Continuous Underwriting

Continuous underwriting is a novel approach to the underwriting process. It enables life insurers to measure risk during the policy's term. Life insurers may reward healthy lifestyles and differentiate their products by continually analyzing complete data sets before, during, and even after the policy is underwritten by constantly analyzing comprehensive data sets before, during, and even after the policy is underwritten.

The amount of data available to life insurers will continue to grow exponentially. The internet of things (IoT), wearable technologies, social media, credit scores, algorithmic health scores, electronic health records, and genetic profiles will give insurers a wealth of data to quickly examine to better understand individual clients.

Accelerated Underwriting

One of the most common complaints from customers about life insurance is that the application procedure takes too long and involves too many steps. This is addressed by accelerated underwriting, which uses automation, data, rules, models, and pathing to produce insurance judgments in a considerably shorter time frame.

Attempts to streamline the underwriting process in the past have failed, including simplified issue products, which eliminated the paramedical exam but generated pricey policies that did not match client needs. While simplified issue plans served a function, they are often no longer competitively priced when compared to digital-first insurers.

Accelerated underwriting is a new and enhanced simplified issue that allows insurers to analyze risk more quickly and precisely. It necessitates that life insurers incorporate a wide range of data into the underwriting process, including data from both traditional and non-traditional sources (MIB, Rx databases, and MVR).

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