Three life insurance coverage underwriting predictions for 2022 and past

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The life insurance and annuity industry proved resilient in 2021, even in the face of COVID-19 and the Delta variant. I am encouraged by the amazing scientific breakthroughs that new vaccines have developed and distributed, and I look forward to a much better 2022. I am also optimistic about the future of our industry. I believe that digital transformation will accelerate in the coming year and we will see technology and human ingenuity work together to deliver underwriting innovation.

When it comes to life insurance underwriting, it is the underwriters themselves who are at the heart of human ingenuity. They are optimistic about their future and accept changes. A survey by Accenture Research of over 500 underwriters found that despite the rapid pace of change in their field, underwriters remain optimistic. They are also excited about the advances in technology in underwriting and how their companies are leveraging those advances. The full results of the study will be released shortly, but you can take a look at it here.

Our projections for 2022 reflect that optimism as we pursue bold new advances in underwriting – advances welcomed by underwriters and made possible by technology.

1. Underwriting will be the focus of the customer experience conversation

The customer experience will determine who wins the digital war for new business and employee talent. People from all segments of the population are increasingly feeling more comfortable doing business digitally. This trend is expected to continue as AI, data analytics, and cognitive insurance platforms simplify and improve the customer experience for everyone. Today’s insurance customers expect a smooth experience right now; they want self-service, but are open to advice if required. The same applies to the employee talent pool. Employees expect a smooth experience, whether they’re working with clients or in the back office. The technologies they use must enable them to deliver a truly enhanced and redesigned insurance experience, not just incremental “business-as-usual” improvements.

2. AI-led underwriting executives will stand out from the crowd

Insurers that continue to invest in Artificial Intelligence (AI) will become even more competitive. According to the GlobalData Emerging Technology Trends Survey 2020, 62 percent of insurers are investing in AI and nearly half believe it will be critical to business development over the next three years. Some insurers are already using AI to take advantage of the huge amounts of data that are now available to them from various sources, such as the health and wellness sector. With the help of AI-processed data, insurers can get more accurate risk assessments and deeper insights into their consumers. These insights can then bring new, differentiated product and service innovations to the market that are aimed at digitally savvy online insurance customers. To get there, however, insurers will need to invest in core digital technologies that will enable them to connect to new third-generation underwriting platforms that leverage AI and automation. All in all, investing in AI will drive business growth through a better experience for underwriters, agents, and consumers

3. Underwriting contributes to insurers’ ESG programs

Environment, sustainability and governance (ESG) are now mainstream, and companies that invest in ESG enjoy both financial and societal benefits. Accenture, working with the World Economic Forum, found that organizations with ingrained sustainability management practices outperform their competitors by 21 percent in terms of both profitability and positive environmental and social outcomes. A separate study by the US SIF Foundation found that as of 2020, ESG assets account for 1/3 of all US assets under professional management.

Life insurers have a role to play here, especially with the convergence of health and wealth in our industry. Underwriting technology has the power and promise to provide coverage to traditionally underserved and underinsured socioeconomic segments. Through the ethical use of AI and transparent, biased predictive models, underwriting can play a key role in helping the industry operate sustainably and fairly.

Finally, there is cloud technology, which helps companies in all industries to work more sustainably by reducing both CO2 emissions and costs. The cloud also gives underwriters the computing power they need to leverage the advances in data analytics required to process the explosive sources of data.

I too am full of optimism when I see the advancement in our industry through technology and human ingenuity. Let’s talk about making your future initiatives a reality and review our upcoming underwriting research.

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Disclaimer: This content is provided for general informational purposes and is not intended to be used in lieu of advice from our professional advisors.
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