Life insurance and annuity companies proved to be resilient in 2021, despite being subjected to COVID-19 and the delta variation of the directive. I’m heartened by the incredible scientific advancements that have resulted in the widespread distribution of new vaccines, and I’m looking forward to a much brighter future in 2022. In addition, I’m hopeful about the future of our business. During the next year, I expect that digital transformation will accelerate, and we will see technology and human brilliance working together to bring underwriting innovation.
Whenever it comes to life insurance underwriting, human ingenuity is at its most eloquent when it comes to the underwriters themselves. These individuals are upbeat about their future and are open to new experiences. According to the results of an Accenture Research poll of over 500 underwriters, underwriters remain positive despite the rapid rate of change in their industry. They are also excited about technology advancements in underwriting, as well as the use of those advancements by their respective firms. The full results of the study will be released in the near future, but you can get a sneak preview of them right now.
This optimism is reflected in our expectations for 2022, as we explore daring new breakthroughs in underwriting—advances that underwriters applaud and that technology allows us to make possible.
Customer Experience Will Revolve Around Underwriting
Who wins the digital war for new business and worker talent will be determined by the experience that customers have with a brand. People of all ages and socioeconomic backgrounds are becoming more comfortable conducting commerce online. That trend is projected to continue as artificial intelligence, data analytics, and cognitive insurance platforms simplify and improve the customer experience for everyone involved in the insurance industry. Customer expectations for today’s insurance products are for a frictionless, in-the-moment experience; they prefer self-service but are open to receiving advisory services when necessary.
In the same way, there is a shortage of qualified workers in the labor market. Working in customer-facing or back-office environments, employees demand a frictionless experience. Instead of incremental “business as usual” improvements, the technologies they utilize must enable them to give a truly better and redesigned insurance experience, rather than merely incremental “business as usual.”
Leaders in AI-powered Underwriting Will Separate
Companies who continue to invest in artificial intelligence (AI) will become increasingly more competitive in their markets. GlobalData Emerging Technology Trends Survey 2020 found that 62 percent of insurers are investing in artificial intelligence, and nearly half feel it will be crucial to their business development over the next three years, according to the survey. Some insurers are already utilizing artificial intelligence to make use of the massive amounts of data that are now available to them from a variety of sources, such as the health and wellness industry. Insurers may acquire more accurate risk assessments and better insights into their customers by processing data with artificial intelligence.
Based on those findings, new differentiated product and service innovations can be introduced into the marketplace and marketed to digitally informed, online insurance consumers. Insurance companies must invest in digital core technologies that will allow them to connect to new third-generation underwriting platforms that take advantage of artificial intelligence and automation in order to get there. All in all, investment in artificial intelligence will result in increased business growth by providing a better experience for underwriters, agents, and consumers.
Insurers’ ESG Programs Will Benefit From Underwriting
Environment, sustainability, and governance (ESG) is now considered mainstream, and organizations that invest in ESG reap both financial and societal rewards as a result. Organizations with deeply ingrained sustainability management practices outperform their peers by 21 percent on both profitability and positive environmental and societal outcomes, according to a study conducted by Accenture in cooperation with the World Economic Forum. According to a separate study conducted by the SIF Foundation in the United States, ESG assets will account for approximately one-third of all assets under professional management in the United States by 2020.
It is the role of life insurers to play in this situation, particularly in light of the convergence of health and wealth that is currently taking place in our sector. Underwriting technology has the potential and promise to expand access to coverage for traditionally neglected and underinsured socio-economic groups in the future. Underwriting may play a critical role in ensuring that the insurance business operates in a sustainable and equitable manner through the ethical application of artificial intelligence and transparent, bias-free predictive modeling.
Finally, cloud computing is assisting organizations across all industries in operating more sustainably by decreasing carbon emissions as well as operating costs. A second benefit of the cloud is that it offers underwriters with the processing capacity they need to take advantage of the breakthroughs in data analytics that are required to deal with the expansion in data sources.
I, too, am filled with hope when I witness the advancement of our sector as a result of technological advancements and human innovation. Talk about how to achieve your future goals and how to use the findings of our underwriting research, which will be released soon.