2021 saw a humungous rise in interesting strategies to enrich the customer experience, especially in insurance. With rising challenges presented by Covid-19 and increased emphasis on wellness and health, there has been tremendous growth in the digital platform for all industries. With evolving market conditions, industries have to adapt and undergo transformations continuously.
The insurance industry saw massive growth in meeting customers digitally, engaging them actively, and providing them with products that benefit their health and future. As we progress towards a better future, there will be more confluence of technology with human creativity and data to deliver innovative solutions. The underwriting that forms the industry’s foundation will see a massive and positive change in the insurance industry.
What is underwriting in insurance?
In simple words, underwriting is the process where the insurance company evaluates the application, health information, lifestyle-related data, etc., of an individual buyer of the insurance. The underwriter classifies the potential insurance buyer based on the risks involved and assigns a premium amount mitigating the same.
Underwriting is not just about rating potential insurers based on assessed risks. Still, it also helps set fair loan rates, provide the right premiums, and accurately calculate investment risk.
While the traditional process of underwriting can be time-consuming, the process has recently accelerated thanks to insurance companies leveraging technology. The transformation to the digital platform has been the most successful in the underwriting industry due to the overwhelming interest and acceptance of underwriters worldwide. Research indicates that underwriters are pretty optimistic by nature; hence we can expect more transformation in this field in the future.
Three predictions for the future in underwriting
Bearing in mind the optimistic nature of underwriters and the ever-changing technology in the background, we have these three predictions for underwriting.
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Customer experience and expertise
Like every industry, the underlying factor for success always lies with the customer experience. Digital innovation has become the core driving factor for success in every sector, and buyers are increasingly gaining expertise in technology. With AI being the center point, insurance companies have been working diligently to enhance customer experience with improved data analysis and better cognizance of customer expectations.
Some insurance customers seek a self-service portal and request advisory only if and where it is required. Employees seek an environment void of friction where they can offer enhanced solutions to their customers. The underwriters will have to build better strategies on existing data and form data maps to provide integrated and innovative solutions to their customers. The time around can be reduced, further enhancing the customer experience.
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AI playing a pivotal role
We are already witnessing massive growth in AI incorporation in many industries, including the insurance industry. With increasing investment in AI, insurers have collected precise data points enabling them to build a more profound insight while assessing potential buyers. With Big Data playing a crucial role, AI’s involvement in harnessing the information from the massive amounts of data and analyzing it to form a meaningful strategy is increasingly imminent.
With information processed by advanced AI techniques, insurers have a better insight into customer perception, customer expectations, risk assessments, and more information regarding the buyers. With the improved information and data available, insurers have built products highly differentiated from conventional solutions that cater to customers digitally and globally.
As customers become more technologically savvy, it is imminent for underwriters to be equipped with the correct data to provide coverage information and risk assessment instantly and online. The new generation platforms for underwriting incorporating the latest automation and AI techniques are a must-have for every insurer to gain a competitive edge in the future. With an investment in AI, progress will be evident across the enterprise, specifically in the underwriting sector.
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Improved sustainability
It is a known fact that companies that spend money on ESG (Environment, Sustainability, and Governance) have been reaping benefits both on the financial and community fronts. Sustainability practices have repeatedly proven to have better profitability and positivity in many organizations. It is also seen that those organizations that continue to invest in ESG strive to have a better outcome at a social and environmental level.
In the insurance industry, where there is a convergence of health and wealth, it is the seethe underwriting sectors in the future. With a predictive model, void of biases and using morality as a scale for using AI, it would be possible to perform equitably and sustainably in the long run. The underwriting sector will be a worthy partner in bringing this sustainability to the insurance industry. It can promise protection to the underinsured, underserved, social, and economic segments worldwide.
The expertise leveraging cloud technology has further helped in improving the prices. At the same time, it also enhances the pricostsile allowing the organizations to sustain without further delay, playing a pivotal role in protecting the environment empowering and equipping the underwriters with the energy for computing the continuously evolving and exploding data. The technology has been helping underwriters to benefit from the latest advancements in data analysis.
The insurance industry is expected to grow over the years to the optimistic perception of the underwriters, the growing technological expertise of the buyers, and the ingenuity of the underwriters working in tandem with technologies like AI. As we advance, the practicing outsourced underwriting services for the insurance sector are all set to expand beyond the conventional model and engage actively with customers across the globe, providing customized, friction-free, sustainable solutions ahead.
