Digital Underwriting: What’s Next?

Digital Underwriting: What’s Next?

The insurance industry is finally making waves in the area of digital underwriting. It’s refreshing to see some carriers step out of their comfort zones and go beyond just automating basic activities with rules engines and more advanced workflow tools. Most carriers are starting to use additional external third-party data to help support the automation process as well, reducing the operational costs of onboarding a new customer and creating a better customer experience. While it seemed to take forever for many carriers to utilize some of the basic third-party data elements, such as Medical Information Bureau or motor vehicle records, or even credit or reinsurance scores, this is finally becoming the norm.

There is much more to come, though, in the advancement of digital or automated underwriting. Some carriers and startups are just beginning to scratch the surface of how data elements and advanced tools can support the underwriting process and help the industry.

There is so much more data available today to support the underwriting of the entire insurance industry: life, health, wealth, auto, home, commercial, business, and more. Wearables (e.g., Fitbit, Apple Watch, and Garmin) and connected health devices such as blood sugar monitors, toothbrushes, and blood pressure monitors help carriers better understand a person’s health. Drones, satellite images, weather data, and connected home and business devices such as water leak, fire, or CO2 detectors better assess the risk of a home or business. Telematics devices that are built into vehicles or mobile apps track a person’s driving patterns and behaviors to help carriers better assess a driver’s risk. All of these are available today and can provide great value to the digital underwriting process, but many are not being used, or their abilities are not being leveraged well enough to provide extreme benefits to the carrier or the customer.

Now let’s add on the advancement of robotic process automation, artificial intelligence, machine learning, and cognitive computing. The insurance industry has a recipe for next-generation digital underwriting: using a combination of human expertise and technology to reduce human error, improve risk, create consistency, and reach the ultimate customer experience without any of the major downfalls.

The Silicon Valley Insurance Accelerator (SVIA) will host its annual InsurTech FUSION Summit: Rise of a Digital Insurance Industry on June 18 and 19, 2019, in San Francisco. The session Next-Gen Digital Underwriting will be a featured topic of conversation with many new data elements and technologies being discussed. Don’t miss the opportunity to learn how to take the next step in your digital underwriting journey.

Register now at www.insurtechfusion.com and get 15% off of your registration using the code SAMANTHAC15. Aite Group and SVIA look forward to seeing you there and helping you take the next step in your digital transformation journey.

Samantha Chow, Senior Life and Annuities Analyst, Aite GroupDigital Underwriting: What’s Next?
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The Future of Insurance: A Customer-Centric Digital Ecosystem

The Future of Insurance: A Customer-Centric Digital Ecosystem

The future of insurance is already upon us as traditional insurance companies incorporate more tech-savvy features into their options, and giant tech companies offer insurance services. Insurers, brokers, InsurTech companies, and companies such as Amazon are changing the foundation of insurance into a digital ecosystem providing connected insurance and value-added services for customers.

Insurance technology has been developing at a rapid pace in the last decade. Software robots can now mimic human actions and produce repetitive tasks across multiple business applications; FinTechs and InsurTech companies have made major inroads by creating powerful applications that handle problems and deliver high-quality digital experiences. Mining social media data is improving risk assessment for insurers, increasing the capabilities of fraud detection and enabling new customer experiences.

The future for insurance is a connected insurance atmosphere, a digital playground for everything from tech giants to hip startups. As platform providers change and become more dominant within these ecosystems, they’re beginning to change what is required to compete as an insurance provider.

Connected Data Boosts Innovation

Insurance companies, such as Progressive, began capturing real-time data from customers. Data-capturing devices and connected data coupled with predictive analytics and machine learning are delivering not only improved customer experience and overall satisfaction but better services and new business models that drive growth and profits.

Connected insurance has given way to personalized premiums for auto insurance companies and their customers. A U.K.-based InsurTech company, Bought By Many, has been aggregating users with specific and personalized insurance needs, allowing insurers to offer them services at scale. This kind of service is reflective of what’s going on in the commercial insurance industry. Everything from data patterns to cloud-based applications are forming what it means to offer insurance to customers, helping to personalize an experience and create a more tailor-fit model of connected insurance.

Insurers have a unique level of access to rich datasets. Most insurance companies can be reluctant when it comes to revealing why they ask certain questions because it can reveal too much about how they price out their products based on data. But InsurTech companies have learned that customers trust them more when they show the benefits of providing such data for a more personalized experience.

Companies who caught on to this customer-centric ecosystem have changed their business models to give customers more control over their premiums. This enables the customer to acquire insurance when and where they need insurance and also enables insurers to reward customers based on their risk profile. This pay-as-you-go, pay-as-you-drive structure has been changing the auto insurance game with companies like Root and MetroMile popping up as disruptors.

This model is also becoming popular among health insurance providers, which rewards customers for living healthier lifestyles with lower premiums. They can do this by tracking behavior using wearable technologies, like with Oscar, a Google-backed InsurTech startup that rewards users for every step they take when they are being tracked using a wearable band. Other insurers are collecting data on heart rate and blood sugar levels for diabetics to adjust their risk profile while also providing coverage. This change in the ecosystem has made insurance companies lifestyle companies or essentially tech companies that offer insurance as a bonus.

Offering Perks

Gamification has made its way into every industry as mobile app usage has seen a sharp rise. User experience and user design show up in insurance companies’ assessments of customers by providing a progress bar to show how much longer the customer has until they are finished. It’s a small but simple way to include gamification into a process that’s usually seen as a nuisance.

Gamification can help to display information for customers more clearly so they choose the right product and service and get the lowest premium for it. This could include having them answer a few basic questions that apply to them the most. Plus, with pay-as-you-go, companies are offering perks and discounts when customers track their lifestyle habits and daily goals, hitting milestones and competing in a friendly way with others in their health community.

AI and UX Design

UX design has paved the way for a more streamlined approach to holding the attention of the customer and prospects. Companies like New York Life offer up an abundant knowledge base for customers looking to get information on the purpose of life insurance and what types of coverage they can purchase. The company has made it easier for first-time insurance buyers to sift through stacks of policies with dense information and get to the information they need on a simpler scale.

When it comes to artificial intelligence (AI), companies like Lemonade, offering renters and home insurance policies for homes, apartments, co-ops, and condos, are using AI bots who can help find the best coverage through web chat features. Plus, mobile apps are allowing customers to get insured in under 90 seconds and paid in three minutes. This is making insurance sexy as opposed to dealing with the long, drawn-out process of legalese that would turn customers away in the past.

InsurTech technology has created a pathway for mobile diagnosis and prescribing, like with Roman, a men’s health startup that allows men to find the service they need for things like erectile dysfunction and hair loss. While not an insurance company, Roman is mirroring a new wave of Teladoc services that most major companies are implementing now with 24/7 access to health care.

The future of insurance is ripe with opportunity for insurers who move beyond a product focus and look deeply into the goals and outcomes that are most important to their customers. Those who learn how to harness data, services, and devices in the digital ecosystems surrounding the insured by leveraging emerging technology and utilizing awesome UX to help customers understand, prevent, and manage risk will emerge as the future insurance leaders.

Mike Connor, CEO, SVIAThe Future of Insurance: A Customer-Centric Digital Ecosystem
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New and Emerging Data Brings Insurance Into the Streaming Age

New and Emerging Data Brings Insurance  Into the Streaming Age

The future of insurance is well and truly here: the only way insurance carriers will be
able to survive and thrive is by utilizing big data, including new and emerging data
sources.

In an interview with Mad Money’s Jim Cramer on CNBC, Chubb Ltd.’s Chairman
and CEO Evan Greenberg commented: “We spend a billion dollars a year on
technology. We’re in a world that’s going from analog to digital…if you remain analog,
you’re history.”

Greenberg wasn’t just describing digitizing an industry that has historically adopted
technology at glacial speeds, but how harnessing big data can help insurers actively
predict and prevent loss, rather than only deal with the financial aftermath.

“Loss costs rise every year by four to six percent,” explained Greenberg. “There is always
inflation on liability, property, repairs, labor, and so on.”

This is where technology, especially AI and machine learning becomes an advantage,
not just the latest industry buzzword. Traditionally, insurance carriers use legacy data
sources across all lines of business and some, like Chubb, are using new and
alternative data sources to alleviate systemic problems. These alternative data sources
include social media and publicly available online data and have been proven to
mitigate loss cost, among many other benefits.

In the interview, Greenberg specifically mentions claims and underwriting as areas to
better serve their clients. For example, the existing process for pricing, quoting, and
underwriting small and medium-sized businesses is predominantly manual, time-
consuming, expensive, and not ideal for the carrier or consumer.

“Right now, if you’re a small business, to underwrite you we ask you about 30
questions. For Chubb, over the next 18 months, that’ll come down to about seven
questions, because we can just scrape the answers from data that is publicly available.
[We] don’t need to bother you with that,” he told Cramer.

By using this type of new and emerging data, carriers can complete the picture of new
business and streamline their intake process by prefilling profile data and standard
eligibility questions with validated data. But why would a carrier only evaluate the
business once during the policy’s lifetime?

“Until now, carriers have looked at data at a single point in time, at the underwriting
stage or the first notice of loss or injury,” says Max Drucker, CEO, and Co-founder of
Carpe Data. “But now we live in a world where data can be accessed continuously, it’s
fluid—data is a stream. So we can see when business is offering a new service, or
when an apartment building added a pool as it happens, rather than waiting for the next,
undetermined point of time when a carrier may check a database.”

An insurer monitoring emerging data sources can see changes as they occur, giving
them the potential to react sooner to both risks and opportunities, like monitoring
business performance and reacting to material changes that either create new risk or
change eligibility.

Other ways that a carrier can see immediate benefits include being able to act quickly
on inaccurate or missed data that would have been too difficult to discover without
consistent data monitoring, or easing the intake of new business with better pre-fill and
eligibility checks. For instance, a beauty salon adding waxing services, or a cafe that
upgraded their alcohol license from beer and wine to add liquor are scenarios that
create potential upsell opportunities and valid touchpoints for agents with their clients.

In short, a matched business in the hands of an agent together with a detailed picture of
risk is a very compelling sales scenario.

“In the small space of time that these alternative data sources have been available to
carriers, they can now be at the forefront of this evolution by having the ability to
continuously monitor their policies with real-time data, across their entire book,” explains
Drucker.

Being able to underwrite with more than a static picture results in a true return on
investment for carriers, with prevented claims, opportunities to upsell, reduced premium
leakage, and overall processing efficiency.

Get all of your insurtech news and insights on the SVIA Blog.

Max Drucker, CEO, Carpe DataNew and Emerging Data Brings Insurance Into the Streaming Age
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SVIA Podcast Series: SMB Insurance | 12 – Startup Showcase

SVIA Podcast Series: SMB Insurance | 12 – Startup Showcase

InsurTech StartUps Pitch ~ Speaking: Natalie L. Wood – SVIA | Scott Knowles – Modgic | Ted Chen – Lifesaver | Adam Kiefer – Talage | Sri Ramaswamy – infinilytics | Calvin Liu – ReSecure | Vas Bhandarkar – ScoreData | Kunal Contractor – Avaamo | Jake Diner – Elafris | Nick Zambruno – HumanAPI |

SVIASVIA Podcast Series: SMB Insurance | 12 – Startup Showcase
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How is CSAA using disruptive trends, technologies, & partnerships as catalysts for innovation?

How is CSAA using disruptive trends, technologies, & partnerships as catalysts for innovation?

Marik Brockman - Vice President Strategy & Innovation - CSAA

Featured Speaker

Marik Brockman, Vice President Strategy & Innovation, CSAA

Presentation Synopsis

Mega trends including changing economies, demographics, customer expectations and values, and emerging technologies such as mobile, big data

SVIAHow is CSAA using disruptive trends, technologies, & partnerships as catalysts for innovation?
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Why is Munich Re recruiting startups to disrupt customer engagement?

Why is Munich Re recruiting startups to disrupt customer engagement?

Andrew Rear , Chief Executive, Digital Partners, Munich RE

Featured Speaker

Andrew Rear , Chief Executive, Digital Partners, Munich RE

Presentation Synopsis

As an industry we don’t design for our customers, we design for ourselves. That has to change. We have to learn to design for how customer see their needs, and how they live their lives. InsurTech startups understand that and by working with them we can accelerate our ability as an industry to make insurance something people want, something that is relevant, accessible, and easy to use.

SVIAWhy is Munich Re recruiting startups to disrupt customer engagement?
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