According to new research by Timetric, increased adoption of technology is apparent in life insurance underwriting. This has been caused by the need to improve customer service, reduce operating costs, and reduce losses from false claims or misrepresentations.
Three key technological developments have had a substantial impact on life insurance underwriting: automation, social media and big data. Life insurers have been using technology to determine premium rates through risk assessment and to process claims.
Automation improving customer service
Automation in life insurance involves the use of information technology to improve customer satisfaction through quick settlement of claims. It is being employed to assess the eligibility of a customer to receive their service where simple criteria templates will suffice, to enable the quick processing of numerous applications.
Social media to detect possible frauds
Social media networks such as Facebook and blogs are used by life insurers to enhance their brand image and market their products. Today, Social media is often used in underwriting processes. Life insurers have been following consumers on social networks to assess the risks that they represent, and to detect possible frauds or misrepresentations in claims made to avoid losses due to incorrect risk assessment and false claims.
Big data technology to speed up application processes
Big data technology and advances in the field of data mining are being used by life insurers to detect fraud patterns. Predictive modelling, an important big data tool, is often used in risk assessment by factoring in customers’ biomedical or lifestyle characteristics. It incorporates several variables into a statistical model and uses analytics to forecast mortality. This will reduce expenses incurred in underwriting and speed up application processes.
The Timetric report: ‘2020 Foresight: Trends in Life Insurance Underwriting’ was published in August 2013