The Underwriter’s Gambit Part 1: A New Workbench

The Underwriter’s Gambit Part 1: A New Workbench

Risk Disclaimer >>
Ad disclosure Fintech-Insight stands firm in its mission to facilitate sound financial decisions for you. We forge alliances with specialists to provide the latest in news and facts. Engagement with designated links, sponsored entries, products and/or services, leading transfers to brokers, or promotional content might entail financial recompense for us. We pledge to protect our users from any negative repercussions arising from utilizing our site. Be informed that no content hosted here should be interpreted as authoritative in legal, tax, investment, financial matters or any expert counsel; it is meant for informational purposes exclusively. Should there be any concerns, securing the guidance of an independent financial consultant is recommended.

pioneered life premium calculations based singularly on age in 1762. Those life tables prevailed until the 1940s, when gender was added as an underwriting criteria, based on gender mortality statistics. In the 70s, following FTC’s warnings on smoking, insurers started rating smokers separate from non-smokers. Yet again in the 80s, the emergence of HIV/AIDS got underwriters to mandate blood routines. The reports lead to criteria expanding to weight, blood pressure, heart rate, family history, cholesterol and hazardous activities.

Underwriting changes. Carriers are better informed about risks and selection continues to improve. Accelerated changes have one common driver: technology. Data has become ubiquitous, being generated from multiple sources including wearables, social media and telemetric devices. Electronic health records are available through partnerships with ecosystem specialists. An example is New York Life that partnered with Cerner to facilitate EHR retrieval, reducing processing time.

The New Workbench

Leading reinsurers and technology vendors have built underwriting platforms wherein automated rules replicate underwriting manuals. Differentiating such platforms are workbenches that support workflows, APIs for third-party data, visualization and reporting aids. Using modern standards, 90%+ applications are processed within minutes.

An underwriting workbench is used to assess information from variegated sources, including third-parties, while leveraging predictive models for decision-making. It facilitates application submission, collaboration, renewal handling, third-party data integration, diary/notes, quotes and documents.

Workbenches are central to insurer workflows, monitoring and controlling a large part of the book of business. Well-designed workbenches allow underwriters to leverage the potential offered by improved data analytics, access IoT technology, and plug into marketplaces. Integration with dynamic data sources allows better-priced risk and proactive risk management.

Trendsetters

Haven Life is a digital life insurance agency that uses algorithms to assess applicants’ historical lab results and medical claims data to generate instant coverage quotes without the need for in-person medical exams. Life insurers are capitalizing on alternate data sources for continuous underwriting. AXA has launched a life insurance policy for senior citizens that comes with an intelligent medical wristband to continuously monitor policyholders’ vital health parameters. Using alternate data, insurers identify emerging risks and are betting on personalized services using individual risk profiles.

Underwriting is a powerful differentiator when it comes to superior customer experience. In life insurance, the concept of “pay as you live” has never been more relevant as now, as consumers conduct life transactions online. Carriers are seeking ways to accelerate underwriting transformation. By automating the many routine tasks and empowering teams with workbenches and alternate data sources, underwriters are taking strides towards newer skillsets and possibilities.

In Part 2, latest trends in algorithmic underwriting and how they are gathering force in various P&C lines are discussed. In Part 3, the focus will shift to the impact from abundance of new alternate data sources.

Cover Image

You get 3 free articles on Daily Fintech. After that you will need to become a member for just US$143 a year (= $0.39 per day) and get all our fresh content and our archives and participate in our forum.

Risk Disclaimer

Fintech-Insight is dedicated to delivering unbiased and dependable insights into cryptocurrency, finance, trading, and stocks. However, we must clarify that we don't offer financial advice, and we strongly recommend users to perform their own research and due diligence.

Leave a Reply