There has been more remote advice, digital servicing and more interactive help with customer journeys, such as co-browsing capability, webchat and multi-channel.
Meanwhile there has been an increase in the use of automation to remove work-arounds.
But how insurers use big data and artificial intelligence to support their claims and underwriting strategies is likely to accelerate as a result of the Covid-19 pandemic.
We have now been living with the virus for many months, but it is still early days to really understand the impact of the coronavirus pandemic on mortality and morbidity, so insurers will be very cautious about how it is approached from an underwriting perspective.
Ian McKenna, founder of FTRC, says in the context of Covid-19, big data and AI have an enormous role to play in helping medical science better understand the long-term impact of the virus.
Such data will also significantly inform insurers’ long-term understanding and approach to the condition.
Key points
- Insurers may use AI to improve their underwriting
- Increasing use of AI may destroy the pooled risk concept
- AI could be used to streamline straight-through processing
He says: “Data from both iPipeline and Iress The Exchange show that [protection] quotation volumes fell away sharply in the spring, but have now returned to near previous levels.
“The reality is we just don’t know the long-term impact the illness will have on people. For the foreseeable future more medical evidence is likely to be requested, especially on larger cases, although firms are trying to use visiting nurses and other techniques to make decisions as quickly as possible.”
He adds: “It will have a huge role to play in how insurers and the medical profession understand the impact of Covid-19.
“Big data makes it possible to see patterns related to demographics, genetics and other illnesses, existing medical conditions and how they impact both the treatment and consequences of illness.”
Underwriting rethink
A report published in July by consultancy McKinsey says Covid-19 lockdowns and ongoing distancing protocols reinforce the need to rethink underwriting. Algorithmic underwriting will increasingly become a prerequisite for staying on the shelf and maintaining current positions in the market.
And with Covid-19 only making today’s life product purchasing experience more difficult, many companies increasingly recognise that underwriting transformation is all the more urgent.
“But this is only the beginning,” the report adds. “Many current efforts to modernise underwriting are only digitally enabling yesterday’s products. Today’s consumers have different preferences and needs than they did several decades ago – yet the content of life insurance policies remain much the same.
