Why Accelerated Underwriting is Critical to Life Insurance Success

 

According to a 2020 LIMRA study, the number of US Life customers preferring to purchase insurance face-to-face fell by roughly 36% in just a decade. Now, more than ever, consumers want fast, easy, non-invasive ways to purchase anything and everything from the comfort of their own homes – insurance included.  This trend is reflected across the industry and has accelerated since the start of the pandemic, as insurers were virtually forced to expedite their shift to fluidless and accelerated underwriting.

One hurdle for Life insurers has consistently been the lack of automation of the underwriting process. For many years, this was partially due to the lack of high-quality, instant evidence data.  With improved instant-data types/sources and as increased hit-rates over the past several years, this is quickly changing.  Life insurance underwriting is certainly undergoing a major transformation.

Some of the primary drivers for Life insurers to implement an accelerated underwriting process are to improve customer satisfaction to meet customers’ digital expectations and to reduce the time it takes to underwrite business. To be successful and remain competitive, accelerated underwriting is absolutely critical.

What is accelerated underwriting and how does it enable better outcomes?

Accelerated underwriting involves the following components:

1. Electronic Applications. E-Apps eliminate the need for paper forms. The digital application is completed and submitted online directly to the underwriting platform, thereby reducing the time and barriers required to collect customer information.
2. Requirements Automation. Automated ordering and evaluation of requirements evidence allows data to be delivered and evaluated instantly.
3. Underwriting Rules. Carrier-configurable underwriting rules determine whether an applicant meets the criteria for accelerated underwriting upon evaluating the insured’s application information and requirements evidence data.
4. Automated Risk Assessment. Eligible cases can be auto-decisioned or referred for additional review. With accelerated underwriting, this process can often be completed in minutes rather than weeks.
5. Data & Analytics. Life carriers use data from multiple sources to analyze and quickly adapt their business models.

All these components work together to make up the accelerated underwriting process and provide coverage to customers faster.

But why is accelerated underwriting critical to the success of life insurance companies in today’s market?

1. Faster processing. As discussed above, accelerated underwriting enables companies to process applications more quickly, allowing them to provide coverage to customers faster. Delays in the purchase process are viewed as buying obstacles by today’s consumer. Life insurers not employing accelerated underwriting are missing opportunities and losing market share.
2. Improved customer experience. Accelerated underwriting vastly improves the customer experience over traditional underwriting. Customers complete applications online and often provide less medical information, making the process much more convenient, less invasive, and faster.
3. Decreased operational costs. Making underwriting decisions quicker reduces costs. Numerous time-consuming tasks and expensive requirements evidence types used in traditional underwriting can often be reduced or eliminated.
4. Improved risk management. Life insurers can better manage risk through accelerated underwriting. Data and analytics allow for more accurate risk assessment and provide carriers with valuable actionable insights.

Summary

In summary, accelerated underwriting is absolutely essential for Life & Annuities carriers to remain competitive.  The benefits are extensive – both for the customers and carriers alike.

 

Learn more about how Sapiens can accelerate your Life & Annuities Underwriting:

Sapiens Life & Annuities

Sapiens UnderwritingPro

Sapiens Intelligence

 

• life and annuities
• underwriting