Underwriting in 3D: Using Data to Adapt and Improve Life Insurance Sales
Denise Garth | August 28, 2020
After 9/11, a disruptive revolution happened in airline travel. Airline security tightened far beyond what we had previously known. In addition to new carry on guidelines, travelers were subjected to more frequent individual screenings. More items had to be removed from our bags and examined. Electronics had to be turned on. Our shoes started coming off. The TSA needed to know us personally before we were allowed to fly.
This, of course, created lines. We had to get up earlier to get to the airport to account for two hours in security. Shorter flights were no longer worth it. “I can drive there in less time.”
So, in 2019, the TSA, doing anything it could to improve the line situation, began using Computed Tomography (CT) scans in many busy airports. CT scans would change 2D baggage scans into 3D scans, allowing the operator to look at an item in greater detail without tagging a bag to be opened and checked by hand. Their ability to “see” the hidden information would shorten lines and streamline the travel experience.
When COVID hit, lines evaporated. Air travel hit rock bottom. Lines are mostly not an issue right now, but public safety is now an even greater issue. In China, for example, large scanners are being used to check human temperatures on anyone traveling. Those with high scans are tagged and removed for further screening because it wouldn’t be practical to individually scan all travelers and crew boarding a plane.
This concept bears a close look for all insurers, and especially for life insurers. In what ways can we use technology to know applicants and policyholders instantly, using that information to protect them and our level of risk in the process? Can we build flexible frameworks for accelerated and fluidless underwriting that will allow us to tackle new issues as they arise and capitalize on new data as it becomes available? Life insurers, group providers and voluntary benefits carriers are entering new regions of opportunity through new doors of data capability.
In Majesco’s latest thought-leadership report, Rethinking Life Insurance: From a Transaction to a Life, Health, Wealth and Wellness Customer Experience, we examine the nature of the purchase experience. Our recent survey across all age groups segmented into two groups – younger (millennial and Gen Z) and older (Gen X and Boomer) generation - painted a picture of a population that is growing in its desire to buy, growing in its goals to stay healthy, and wanting the purchase to happen, not so much as a traditional transaction, but as a value-added protection at the point of life experience. In last week’s blog, we highlighted how “selling where life happens” is crucial if we are to consider how to make the purchase easy and seamless.
Every experience holds data.
Today, nearly every aspect of the B2B, B2B2C and B2C customer experience has a level of intelligence that has created a wealth of data about customer activity, behavior and preference. From smart speakers to smart watches, phones, appliances, outlets and more — sensors and signals are everywhere. And, with customer permission, they are measuring nearly every aspect of their lives. The result is that we now have the data to capture the instantaneous 3D view instead of the 2D view. But insurers must strategically invest in ways to capture and master this data to transform customer experiences in an age of instant digital engagement, delivery and satisfaction.
The use of data for life insurance is crucially important. Interestingly, the insurance industry has been capturing behavioral insights from customer interactions—offline—for many decades, before technology simplified managing customer relationships. Companies unfortunately didn’t know how to optimize their use of the data before now. That must change if insurers are to survive.
Can data improve the experience?
To meet the needs and expectations of today’s customers, insurers must create a radically different insurance experience, moving from a reactive to proactive approach using real-time data, artificial intelligence (AI), machine learning (ML) and behavioral science to make processes and transactions simple, convenient, transparent and fast like other businesses. Encouragingly, our research found that the younger generation is ready and willing to use and share most new data sources for buying and rating life insurance. This willingness will be a key to unlocking sales at the point of life events.
Adding to this market opportunity, Majesco’s survey data showed that even those Gen Z/Millennials who currently DON’T have life insurance are open to these new data sources being used, nearly the same as their peers who DO have life insurance.
Insurers who are not actively planning and building capabilities to use new sources of data will be rapidly left behind.
MIB’s February 2020 activity report highlighted that pandemic-related demand for life policies pushed application activity to its highest level for the period since 2015. As noted previously, online, “fluidless” life insurance has dramatically increased during the first three months of 2020.
To accomplish this major experience transformation and bring the decision and the purchase into the same moment, insurers are moving from an underwriter-centric view to a digital, data driven, accelerated and sometimes fluidless underwriting process. Accelerated underwriting is becoming widespread for term insurance. As shown in Figure 1, the interest in products that use dynamic underwriting and pricing is over two times higher in the younger generations – a significant difference that many insurers are unable to fulfill today. Once again, our data showed the younger generations who DO NOT currently have life insurance are even more interested in this option than their peers who DO have life insurance (41% vs 35%). Market and growth opportunities await for those who accelerate the move to dynamic underwriting and pricing with new data sources.
Figure 1: Interest in products that use dynamic underwriting and pricing
With the proper use of data, we don't stop people at the checkout counter.
In the traditional underwriting model, we ask people to come to the checkout counter for a price check, then send them home until we verify their ability to buy by gathering lots of medical and personal data. Companies are surprised with their level of not taken policies. But if you put yourself in the customer’s shoes, why do you want to go thru the extra hassle and time, particularly when other options are emerging. Using this picture, we can correctly assume that accelerated underwriting is a modern-day non-negotiable capability that will fit the desire for instant gratification at the point of need.
As a start, some insurers are reducing attending physician statements (APS) and paramedical exams (providing bodily fluids) and using more third-party data and predictive analytics-based models to automate and enhance the underwriting process.
Others are bringing in behavioral data from fitness and wellness programs, social media data, and new data sources with AI and machine learning algorithms to create “smart, automated underwriting” that is continuously learning and adapting. All of this is redefining the process and cycle time and is creating a completely different customer experience.
The right ingredients in the right place at the moment of opportunity
Here is where technology acts as the enabler. For life insurers to fit their products into lifestyles and experiences instead of traditional transactions, several components must be in place.
- Cloud-Use for Digital Enablement: The point of sale (and marketing) must be well-integrated into current life processes. Often this means partnerships or channel expansion that will require digital integration using APIs and a Cloud-based environment.
- Data Integration (and AI / ML) for Accelerated and Fluidless Underwriting: Insurers need to create ways to go fluidless and physician-less so they can automate decisions in real-time.
- Ecosystem Philosophy: Insurers need to ramp up quickly. They can do this by partnering with ecosystem developers, such as Majesco, who can give them access to the data sources, channels and technology opportunities that will contribute to quick transformation.
- Innovate for the Future: Innovate. Replicate. Reach. Learning the lessons from the past, that good data doesn’t necessarily get used effectively, insurers need to place themselves on a course for optimal data usage across the enterprise. They need to innovate how they use data to get a 3D picture for accelerated underwriting. They need to replicate greenfield and startup methodologies that transform data accessibility into improved experiences. And they need to reach growing and untapped markets with products that sell at the point of life experiences, instead of relying upon traditional sales tactics.
Industry status quo is no longer an option. Your customers, particularly the younger generation who will be your dominant buyers are expecting all of this and more. They want a customer relationship with a broader value to make their lives better across life, health, wealth and lifestyle needs.
How do your strategies align to what customers want? What plans are you taking to improve your odds of success?
Your answers will determine your readiness in a new decade and the future of life insurance focused on making customers lives better across life, health, wealth and wellness … and if you will ride a new boom era of life insurance.
Are you ready? Your customers are.
For more insights on how you can end transactional thinking and begin capitalizing on customer life experiences, be sure to download, Rethinking Life Insurance: From a Transaction to a Life, Health, Wealth and Wellness Customer Experience.
- Your Insurtech Investment: Making the Most of the Software You Already Have
- Electronic Chat with Sanjeev Kumar Chaudhry, Founder and CEO, Gigaforce
- Electronic Chat with Sylvester Mathis, Chief Insurance Officer, Insurity
- Inside the ITA: Meet the Board
- Digital Drip: New Lease on Life
- Transformation Corner: Core System Transformation
- Big Fix: Closing the Data Divide
- Tech, Processes, and a Plan
- Core Systems: Out with the Old?
- 5 Things to Consider When Modernizing a Surety System
- Four Benefits of Integrating Mobile Crash Detection and Accident Management
- Everybody Loves Gelato
- Electronic Chat with Jennifer Smith, VP of L&A Product Strategy, Sapiens North America
- Now Accepting Nominations for "Pick of the Litter" Issue
- “New Normal” Requires an Insurance Analytics Evolution
- Accuracy: Are Data Providers Pulling the Wool Over Your Eyes?
- Agents Send More Business to Insurers with Better Tech, Celent Finds
- Electronic Chat with B2Z Insurance
- Still Standing, Still Learning, and Still at Home
- ITA Pro Magazine, May/June 2021
- Electronic Chat with Chris Ewing, Founder and CEO, One Inc
- Electronic Chat with Sharmila Ray, Head of Carrier Strategy, Solutions and Go-To-Market, Vertafore
- Electronic Chat with Alex Devoto, Founder, LVLFi
- Prince Charles, Lloyd's Launch Sustainability Insurance Task Force
- UFCIC Becomes First U.S. Insurer to Accept Cryptocurrency for Premium Payments
- Electronic Chat with Ty Harris, Co-Founder, Openly Insurance
- The Insurance Industry’s Reliance on Friction: A Good Strategy?
- Loss Control, Premium Audit Systems Critical to Customer Experience, Celent Finds
- What's AI-Right and AI-Wrong?
- The Drive for Digital
- Electronic Chat with Candice Smith, Founder and CEO, Caregiven
- Electronic Chat with Nestor Hugo Solari, Founder/CEO, Sigo
- The Giant Hole in Actuarial Models
- Electronic Chat with Trent Cooksley, COO and Co-Founder, Cowbell Cyber
- The ITA Pro March/April 2021 issue is here!
- Purchasing and Innovation: Friends or Enemies?
- COVID Drives More Reliance on Risk Management Systems, New Study Finds
- Electronic Chat with Robert Clark, CEO, Cloverleaf Analytics
- Solving Customer Communications Challenges with Hybrid Mail
- Six Trends Shaping Digital Insurance Tech Strategies in 2021
- Billing a Key Component of Customer Service, Celent Finds
- Why Data Science Fails
- Electronic Chat with Andrew Jernigan, CEO, and Allen Koski, President and Chief Innovation Officer, Insured Nomads
- Electronic Chat with Allison Martin, CEO and Founder, UDoTest
- Are Carriers Ready for the Coming Crash?
- Electronic Chat with Christopher Moore, Director for North American Sales Engineering and Solutions, Trifacta
- Next Insurance Partners with Amazon Business Prime to Provide Small Businesses with Affordable Digital Insurance Options
- An AI Walks Into an Electronics Store...
- InsurTech NY Announces Global Early-Stage Competition Winners
- World’s Worst County/Western Insurtech Song
- Electronic Chat with Anne-Laure Klein, COO, Akur8
- COVID-19 One Year Later: The Digital Transformation of Insurance
- Electronic Chat with Michael Kassing, CEO/CVO, insured.io
- BrokerTech Ventures Announces 2021 Cohort Class for Accelerator
- An Entirely Preventable Disaster
- Flipping the Fraud Triangle
- The January/February ITA Pro Magazine is here!
- Credit Risk, ESG, Cybersecurity Top Risk Concerns for Financial Institutions, Deloitte Finds
- Electronic Chat with Ellen Moser, Senior Client Executive, Origami Risk LLC
- The Answer to “So What?”
- Leaders Rise from a Year Like No Other!
- Electronic Chat with Jonathan Roomer, Co-Founder, YuLife
- Getting Creative to Hit COVID Curveballs Out of the Park
- Electronic Chat with Eugenio Gonzalez, Plug and Play
- New Report Projects Global Insurtech to Grow by $21 Billion During 2020-2024
- The 2020 Virtual Event Wasteland
- Insurtechs, Investors Optimistic About Post-COVID Future, New DIA/McKinsey Study Finds
- Finding Grandmas
- No Code / Low Code: The New “Shortest Route” In Insurance Delivery
- Are You Addicted to Copy-and-Paste?
- Electronic Chat with Nino Tarantino, CEO- Americas, Insurance and Mobility Solutions (IMS)
- Driving Life Insurance:Tech Alone Won’t Solve Business Problems
- Electronic Chat with Robin Roberson, Managing Director, North America, Claim Central Consolidated
- How Do You Make It Happen?
- Electronic Chat with Jason Liu, CEO, Zywave
- New Partnership Models Take Program Business to the Next Level
- New Study Finds Less than Half of Consumers Trust Insurers to Respond to Their Needs
- Electronic Chat with Andrew Mauritzen, CFO and Head of Insurance Industry, Exactuals
- You Want Us To Do WHAT For Free?
- Electronic Chat with Evgeny Aleksandrov, Co-founder and CEO, Pilotbird
- Electronic Chat with Chris Cheatham, CEO, RiskGenius
- New MIT Sloan Study Finds Few Companies Gain Big Benefits from AI
- The September/October ITA Pro magazine is here!
- “Being Right” is Just the Start of the Battle
- Electronic Chat with Amit Ranjan, Executive VP and CAO, Xceedance
- Planning for Your Business and Tech Future: Strategies, Plans and Budgets for Rapid Transformation
- Electronic Chat with Jimmy Padia, Founder and CEO, Floatbot
- Gelato with Dots and Sprinkles
- COVID-19 and the Insurtech “Junk Drawer”
- Even “Change” is Different Now. Your Strategic Planning Needs to Be Too.
- The Road Ahead for P&C Insurers: How to Understand Customers Better and Navigate the Post-COVID Insurance Market
- Electronic Chat with Jake Tamarkin, Co-founder and CEO, Everyday Life
- Strategic Planning in the “New Normal” Digital Era of Insurance – Your Next Move
- Insurer Tech Investment Priorities See Major Shift in a Post-COVID World
- Plug and Play Selects 25 Insurtech Startups for Winter Batches
- Digital Transformation – A Top Strategic Priority and New Reality
- Four Steps to Successful Migration of Insurance CCM Applications
- COVID-19 Accelerates Insurance Digitalization to Meet Customer Demand: World InsurTech Report 2020
- Electronic Chat with Greg Williams, Co-Founder, President & CEO, Acrisure
- Electronic Chat with Matt Perlman, Partner, IA Capital Group
- Insurer Digitalization: Are you a Competitor or a Laggard?
- Leaders are Leading and Creating the Future of Insurance Distribution
- 3 Things You Need to Know About No-Code
- Electronic Chat with Adam Kiefer, CEO, Talage
- Underwriting in 3D: Using Data to Adapt and Improve Life Insurance Sales
- Getting Past the "Gelato Syndrome"
- Insurers Know CX/UX is Important, but Don't Agree on Execution, Study Finds
- Electronic Chat with Steve Lekas, Branch Insurance
- How AI Can Attract Millennial Talent to the Insurance Industry
- Preventing Data Breaches
- A New Boom for Life Insurance: Shifting Away from the 250-Year-Old Policy Transaction
- Electronic Chat with Ty Harris, Founder and CEO, Openly
- A Digital Wildfire Creates a Burning Platform for Digital Insurance Business Transformation
- Digitalization, COVID-19 Spurring More IT Investment in Cybersecurity
- Electronic Chat with Michael DeGusta, CEO, ClarionDoor
- U.S. Consumers Significantly Underestimate Flood Risk, New Survey Finds
- The Future of Insurance: Opportunities in Ecosystems
- Electronic Chat with Todd Greenbaum, CEO, Input 1
- Majesco to be Acquired by Thoma Bravo
- The Evolving Role of Managing General Agencies
- Electronic Chat with Char Hu
- Electronic Chat with Allan L. Egbert, Jr.
- Electronic Chat with Christopher Tramontano and Zbigniew Gawienczuk
- Data Science is Gelato
- Insurance Innovation: Alive and Kicking
- Independent Agents Divided on Digital Experience, New Survey Finds
- Electronic Chat with Michael Jones
- Electronic Chat with Paul VanderMarck
- As Auto Insurance Premiums Shrink, Insurers Need Mobility Ecosystem, New Study Finds
- Property & Casualty Insurers Raise Digital Games as COVID-19 Elevates Customer Expectations, J.D. Power Finds
- Electronic Chat with Bobbie Shrivastav
- Meet the Board: Marissa Buckley
- Big Data and Insurtech: A Carrier Perspective
- Traditional Insurers Need Open Ecosystems, Partnerships to Remain Competitive, CapGemini Report Finds
- Electronic Chat with John C. Siegman
- 4 Ways AI is Empowering Insurers During COVID-19
- 6 Big Changes to Insurance from the COVID-19 Crisis
- Electronic Chat with Christopher Ewing
- Independent Agency Staff Morale High During COVID-19, New Survey Finds
- Electronic Chat with Brad Epker
- Tapping AI to Improve Policyholder Experience
- Electronic Chat with Manisha Bhargava
- ITA Pro Magazine, March/April 2020
- COVID-19 a Game Changer for Workers’ Comp
- Electronic Chat with Steve Comer
- COVID-19 Pandemic Forces Cancellation of ITA LIVE 2020
- Leveraging Digital Resources in the Time of COVID-19
- Electronic Chat with Robert Hartwig on COVID-19 and Insurance
- Celent Study: Most Small Businesses Still Unclear on Importance of Cyber Insurance
- The January/February 2020 ITA Pro is here!
- Deloitte: New C-Suite Roles Mean More Opportunities for Women
- Electronic Chat with Pankaj Parashar
- Electronic Chat with Tara Kelly
- Electronic Chat with Chuck Wilson
- ITA, InsNerds Collaborate to Enhance ITA LIVE 2020 Content and Coverage
- How SMBs Can Compete in Digital Ecosystems in the 2020s
- 4 Ways Insurance Can Prepare for New Data Privacy Laws
- Brewer Lane Ventures Launches and Hires Insurtech Vet Martha Notaras as Managing Partner
- 2020 GIA Cohort Launches on January 14
- The November/December 2019 ITA Pro is here!
- Electronic Chat with Joshua Snead
- Electronic Chat with Wendy Aarons-Corman
- Simplifying the Move to a Third-party Print Provider
- Take a Business-Driven Approach to Continuous Improvement for Core Systems and Processes
- Electronic Chat with Ron Glozman
- Guidewire’s Data Guru Mike Byam on How Insurers are Using Internal and Third-Party Data
- Electronic Chat with Russ Bostick
- Electronic Chat with Rock Schindler
- Electronic Chat with John Siegman
- Electronic Chat with Martin Burlingame
- Insurtech Landscape 2019: Top 5 Takeaways
- Grinnell Mutual Tackles Massive Transformation -- in Stride
- A Candid Conversation with Paul Mang
- SageSure Insurance Managers Improved Competitiveness by Consolidating Payments to a Single Digital Platform
- Digital Does Matter in Insurance-- And Insurers are Missing the Mark
- The 22nd-Century Insurer: Taking a Cloud-First IT Approach
- The September/October 2019 issue of ITA PRO magazine is now available in digital format here:
- ITA Pro Magazine May/June 2019
- Spotlight on the 2019 IASA Conference
- ValueMomentum Selects Erie as Site of Regional Development Center
- Capgemini and Majesco Become Alliance Partners
- Electronic Chat with Dr. Dan Shoham
- Electronic Chat with Todd Greenbaum
- Martha Notaras: The “Outsider” with an Amazing Inside View
- Electronic Chat with Larissa Tosch
- Martha Notaras Will Join ITA LIVE 2019 as a Keynote Speaker
- Five Things to Consider When Evaluating Your Cyber Risk
- ITA Pro Magazine, January/February 2019
- Synergy Between Insurers' IT and Analytics Teams Key to Operationalizing Insights, Says Novarica
- Major Ransomware Attack Could Hit U.S. with $89B In Economic Damages
- ITA Announces 1st of Three Keynote Speakers at ITA LIVE 2019
- Electronic Chat with Jeroen Morrenhof
- Legacy Systems Are Dead. Really? Don't Count On It.
- Now Accepting Nominations for the 2019 ITA Bridge Awards
- It's time to register for ITA LIVE!
- Registration is Now Open for ITA LIVE 2019!
- What to Expect from a Digital Experience Platform Implementation
- ITA Pro Magazine September Edition is Now Available
- It's National IT Professionals Day
- Save the Date for ITA-LIVE 2019
- OneShield Software and UrbanStat Work Together to Improve Real-Time Analytics and Risk Decision-Making
- ITA LIVE 2019 - SAVE THE DATE!
- Insurance Technology Association Announces New Editor-in-Chief
- August 2018 Edition ITA Pro Magazine is Now Available
- Enterprise Architecture in an Agile World
- Top 10 Tips for Securing Your Mobile Devices and Sensitive Client Data
- Industry Insight: 4 Global Insurance Trends in Digital, Data, Content Services and Security
- Diving Deeper into Prioritizing Your Strategic Digital investments
- Why Content Rules
- How Mass Personalization Will Open the Small Business Benefits Market
- At Year End 2017, Will Your Organization Be Protected from Cyber Risks?
- Do Insurance Bots Dream of Mitigating Risk?
- Conditioned to Respond
- Managing & Mobilizing Insurance Data in a Connected World
- Race to the Finish Line
- New Tools, New Opportunities in Claims
- ITA LIVE: Reaching Insurance Industry Crossroads
- Advice to Insurance IT Leaders: Keep Your Eye on the Ball
- New Date, Venue for ITA LIVE 2017
- Guidewire Makes Major Push to Small and Midtier Market by Acquiring ISCS
- Insurance Disruption is Happening Right Now
- Insurity Adds Strategic Investment Partner, General Atlantic
- Beyond Transformation: The Convergence of Finance, Risk, and Actuarial Functions
- The Rapid Evolution of Consumer Protection Regulation
- Talent Hunt: Finding, Attracting, Retaining Top People
- Insurers Flexing Their Distribution Models
- Technology Driving Disruption in Insurance
- Fear of ‘Next Bubble’ Challenges Life, Annuity Carriers
- Technology Allows Commercial Lines Insurers to Stand Out
- Single Sign-on Viewed as Biggest Tech Challenge for Agencies
- ISCS Observes 20th Anniversary; Scurto Predicts Major Changes Ahead
- Policyholders and Their First Impressions
- Progressive Making Progress on the UBI Front
- High and Dry: Insurers Search for Disaster Recovery Plans
- Insurers Sign The (Un)Dotted Line
- Reflections of a Retired Insurance CIO
- Mobile Device Management Just One Answer to BYOD Issue
- Lessons from GEICO and Progressive on Winning the Critical Buying Stage
- You Are a Target for a Cyber Attack
- Web-based Systems are the Next Evolution in Claims Technology
- Gaining a “Wow” Experience from Web Users
- Time to Shift from Business/IT Alignment to Business/IT Alliance
- Healthcare Insurers Changing to Consumer Model
- Organization is the Key for Selecting Software Vendors
- Analysts Expound on the Needs of the Mid-tier Insurance Market
- Finding the Cure for Obamacare’s Website
- New Software Solutions Benefit Insurers on the Inside and Outside
- Products, Market Impede Investment in Systems for Life Insurers
- Combatting Cyber Threats: Predict, Prevent, Persist
- The Future of Telematics Heads Beyond Insurance
- The Shame in Cyber Security Lapses
- Building Policy Administration Systems for the Future
- Insurers Look Into The Eyes of Their Policyholders
- It’s a New Dawn for the ITA
INSURANCE IT NEWS
- Arturo Hires New General Counsel
- Zurich NA Adds Chisel AI for Underwriting
- Insurity Acquires AuSuM Systems
- Method Insurance to Streamline Underwriting with Origami Risk
- BrokerTech Ventures Launches BTV LATAM Partnership, Adds UNICO Group as Broker Partner
- Roost Rolls Out White-Label Home Security Solution
- Norway’s Gjensidige Pensjonsforsikring Selects Sapiens Digital Solution
- Insurium Names Insurtech Veteran Jeremy Williams CEO
The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
ITA LIVE 2020
ITA LIVE 2020 –SAVE THE DATE!
April 5th – 7th, 2020
The Diplomat Resort
Become a member today to receive updates – www.itapro.org/MR
You have surely heard it said that small businesses are the growth engine for America. Today, the phrase has a special ring to it for benefits... READ MORE
With stagnant growth and lingering low interest rates, the life insurance industry faces a challenging future... READ MORE
Finding insurance carriers willing to write commercial lines risks has always been a challenge for producers... READ MORE
As Guidewire Software prepares for the start of Connections, its 11th annual user conference that begins on Nov. 2, Brian Desmond, chief marketing... READ MORE
Successful implementation requires balancing operational and emotional issues... READ MORE
- Vendor Views