Underwriting, Automation And The Customer Journey

In this White Paper, SCOR draw on their extensive global research to discuss the use of underwriting engines, their provision by reinsurers and how this model is being  challenged by changes in customer expectations, technology, adviser engagement and the pan-industry problem of low growth.
This echoes our ongoing global customer research in its emphasis on the importance of understanding the customer perspective, focusing specifically on their path to purchase and their lived experience of the insurance “product”.
While consumers are open to the idea of automated underwriting, their experience of that service has been less than consistent, let alone ideal. With customers enjoying optimal digital experiences ranging from Uber to highly-personalised iPhone apps, the industry needs to invest in customer-friendly platforms that dramatically simplify purchase, respect privacy and find avenues to create added value.
All indicators point to the need for the industry to see the underwriting engine as an opportunity to engage advisers rather than replace them. Engine development should be seen as an opportunity to invest in holistic innovation around business development rather than simply around efficiency. By doing so, industry players will not only harness increased efficiency, but drive growth and adviser engagement, again improving the customer journey.
The unalloyed good news arising from our research is that automation is growing across different regions and business models around the world. That growth is the result of more intelligent application by the industry. Resistance at the distribution level is being met with tailored technology development that draws in external data, cost-cutting via cloud delivery and integration into the holistic business development platforms mentioned above. The result is that despite some false starts, automation is nearing the point where it will offer companies better access to new consumer segments and more effective business models.
Where does the reinsurer sit in this automation environment? It is a good question, given that much of the momentum behind engine development came from reinsurers.
Expectations have moved on – and aspersions have been cast on reinsurer involvement as insurers struggled with implementation and integration issues, questioning reinsurers’ ability to deliver on the ever-evolving technology requirements.
However, we believe that reinsurers still have much to offer if they widen their perspective to embrace the views of other stakeholders – the customer’s journey and the adviser’s experience especially. This approach – combined with better partnering in the digital space and our strengths in risk management, data and finance – mean that we can enjoy and retain insurer confidence.
Indeed, this approach, where all stakeholders take a wider view of the customer’s needs and of the industry’s potential, is one that promises a return to the growth all stakeholders are seeking.
To download a PDF version of the full report, please use the download button at the top of the page.