Jigyasa Singh | Managing Director | Financial Services and Technology | Accenture Africa | mail me |
The life insurance and annuity industry proved resilient in 2021, even in the face of the many challenges associated with COVID-19. It’s now a given that the pandemic forced insurers to adopt digital technologies and operate more in the digital space. This digital shift is the source of the industry’s resilience as more companies, and customers, enjoy the benefits of their digital transformations.
In 2022, we predict this trend will accelerate and a host of new underwriting innovations will emerge as technology and human ingenuity work increasingly smoothly and effectively together.
When it comes to life insurance underwriting, it’s the underwriters themselves who provide the human ingenuity. In 2022, they will have new digital technologies and capabilities at their fingertips that will allow them to pursue bold new advances in underwriting.
Underwriting will be at the centre of CX
People from all demographics are increasingly comfortable doing business digitally. Consequently, customer experience (CX) will determine who wins the digital war for new business and workforce talent in the life insurance and annuity industry.
This trend is expected to continue as artificial intelligence (AI), data analytics, and cognitive insurance platforms simplify and improve CX for everyone. Today’s insurance customers expect a friction-free, in-the-moment experience; they want self-service but are open to advisory services when needed.
The same applies to the workforce talent pool. Workers expect a friction-free experience, whether they are customer-facing or in the back office. Technology must empower the workforce to provide a truly improved and reimagined insurance experience, not just incremental ‘business as usual’ improvements.
AI-led underwriting leaders will pull away from the pack
Insurers that continue to invest in AI will become even more competitive. Sixty-two percent of insurers are investing in AI and nearly half believe it will be critical to business development over the next three years, according to the GlobalData Emerging Technology Trends Survey 2020.
Some insurers are already using AI to harness the vast quantities of data now available to them from different sources, such as the health and wellness industry.
Using AI-processed data, insurers can generate more accurate risk assessments while gaining deeper insights into their consumers. Those insights can then drive new differentiated product and service innovations to market, targeting digitally savvy, online insurance consumers.
However, to get there, insurers must invest in core technologies that will enable them to connect to new third-generation underwriting platforms that take advantage of AI and automation.
All in all, investing in AI will generate business growth through a better experience for underwriters, agents, and consumers.
Underwriting will contribute to insurers’ ESG programs
Environmental Social Governance (ESG), is now mainstream, and companies that invest in ESG enjoy both financial and societal benefits.
In collaboration with the World Economic Forum, we found that organisations with deeply embedded sustainability management practices outperform peers by 21 percent on both profitability and positive environmental and societal outcomes.
A separate study by the U.S. SIF Foundation found that, as of 2020, ESG assets account for one-third of total U.S. assets under professional management.
Life insurers have a role to play here, particularly with the convergence of health and wealth underway in our industry. Underwriting technology holds the promise and the power to offer coverage to traditionally underserved and underinsured socio-economic segments.
Through the ethical use of AI and transparent, bias-free predictive modelling, underwriting can play a key role in helping the industry operate sustainably and equitably.
In conclusion
Finally, there’s cloud technology, which is helping businesses from all industries operate more sustainably by reducing carbon emissions as well as costs. The cloud also provides underwriters with the computing power required to take advantage of the advances in data analytics needed to process the explosion in data sources.
Our research has shown that customers trust a blend of digital capabilities and human interaction when making significant financial decisions, such as purchasing life insurance.
In 2022, we expect to see human ingenuity and digital capabilities working more closely and effectively together than ever before, providing customers with their most trusted option.
