3 life insurance underwriting predictions for the year ahead
Life insurance stands on the cusp of a new chapter in reinvention. Until now, insurers have been gradually moving forward with wide-scale digital transformation. But with the impacts of AI, including generative AI, change is coming fast. We’re in a vibrant new year, and life insurers are starting to accelerate and implement their reinvention strategies. This is the time to be bold.
These underwriting predictions offer insights into how carriers can take action to truly become digital this year.
Generative AI brings next-level customer centricity
Generative AI-empowered customer centricity will close the gap even further between carriers and customers for more personalized product offerings and services. This trend will continue to reach new levels in the year ahead as new technologies enable deeper connections between customers, advisors and carriers. Recent Accenture research found that today’s customers feel the need for protection in areas beyond what traditional insurance offers. For example, the next generation of insurance customers say they feel less protected for mental health. To address these concerns and more, guidance from an advisor is key. However, insurers have been unable to provide that level of customer experience—until now.
Generative AI extends the care and knowledge of hyper-personalized solutions to more people. Digital agents, diverse chat functionalities, ask-me-anything capabilities and the evolution of enterprise-level generative AI solutions are swiftly bridging existing gaps within the customer-advisor-carrier framework in the industry—and this is just in the beginning stages.
In last year’s predictions, I highlighted how new levels of AI and automation capabilities would enhance real-time underwriting decisions and enable a faster digital buying experience. We believe this trend will also continue this year as more and more life insurers begin their implementation strategies.
It’s worth monitoring the development of generative AI underwriting tools in 2023 that work to enhance the efficiency and accuracy of underwriting and risk management as well as streamline processes and generate valuable insights. Often referred to as Underwriter Co-pilot at Accenture, this technology will play an even stronger role in 2024 as it continues to be fine-tuned with advances in LLMs.
I want to be clear that new technologies will not replace advisors. These technologies are necessary as insurers continue to face skilled labor shortages across the insurance value chain. The solutions that are more personal and customized work to address a different type of skills shortage. With the retirement crisis in insurance still on the horizon, Human + Machine collaboration will become even more crucial as we look for new ways to support employees across the core business functions of both underwriting and claims.
To share a concrete and recent industry implementation, Accenture helped a large A&H insurer to automate its claims process by using advanced voice AI, AI-powered human assist capabilities, a digital virtual assistant and proactive, multi-day journeys. The journeys involved two-way messaging tied to an event that helped complete a customer’s request in the same channel for a smoother experience while the AI-powered assistant worked to provide real-time AI-based guidance to agents during customer conversations.
Digitalization will pick up speed to start the reinvention journey
Life insurers may tout digital underwriting processes and aspirations, but many are still stuck in analog operations. Carriers have been paper-based companies with paper-based processes, and this continues to be the foundation of business as today’s paper takes the form of PDFs, Excels and Adobe. But in 2024, true digitalization and the transition to real-time data will be more achievable than ever if carriers have the imagination and leadership to start the reinvention journey.
The reinvention will be to truly make life insurance digital end-to-end—transitioning everything in your business to real-time data. From improving your claims core and engagement system to enhancing the underwriter’s workflow, once information is data, there are so many ways to rewrite processes. And the benefits are there, including expense savings, uptake and many more. While I do not believe this will be the year for completing full reinvention, it is the year to start your journey by focusing on pieces of your business to reinvent.
I would recommend taking inspiration from one of today’s industry-transforming leaders. Ping An launched a pilot digital solution to enhance agent planning, increase sales performance and improve its life insurance business. This pilot resulted in a decrease of development time by 30% and a service re-use rate of 25%.
The time is now to move from experimentation to implementation
To start any journey requires action. Several life insurers will take important steps in their digital journeys this year by going beyond proof of concept to implement the transformative tools and mature technologies currently available.
Entering the implementation phase will drive business transformation, impacting everything from the underwriting experience and the claims experience to the customer experience and beyond. As a growing technology area in insurance, intelligent ingestion (the ability to digitally ingest data) offers incredible advantages as a starting point for this phase.
As a final thought for this blog post, another noteworthy development to keep an eye on is the emergence of comprehensive beneficiary care services as a distinguishing value proposition for the selling of new products—a topic I’ll explore more in my next blog. Stay tuned.
Let’s talk about implementing initiatives for your reinvention journey.
Additionally, check out Accenture’s new network of generative AI studios.
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