I attend many webinars and now finally travel to industry conferences. Speakers love to use analogies when attempting to make comparisons to hammer home a point. Sometimes it connects and sometimes it is just too way out there for the audience to understand. Either way, in 2022 we have turned the corner in life insurtech from AI in underwriting and expansive use of electronic health records, to innovating the sales digital experience and renovating the life insurance value chain. Since we have turned the page, a metaphor would be more appropriate when describing the exciting innovations in life insurance technology. Here is my metaphor, “Life Insurtech in 2022 is a whole new highway.”
Five Ways to Renovate the Life Insurance Value Chain
The first week of March my company, InsurTech Express, exhibited at the iPipeline Connections conference in Las Vegas. At the conference, I met Hari Srinivasan, CEO, and Nicole Mwesigwa, co-founder and COO, of iCover. As I have said in previous Tech-Tock articles, data is the fuel driving innovation in the life insurtech space. iCover is an AI/algorithmic underwriting platform that assesses, prices and delivers life insurance in five minutes. With a built-in eApp, QUITM behavior-based questions and a proprietary decision engine, iCover can transform your new business process in 12 weeks.
By most measures life insurance is essential to household economic stability, but ownership fell in the last decade from 63 percent to 52 percent (these stats are from LIMRA Fast Stats Sept. 2021). So, what is preventing us from “connecting” with and “covering” more consumers? Lack of product innovation and the buying experience, which is too long and too complicated! The good news is we have the tools, the data, and the talent to change the trajectory of our industry. Here are five ideas that can be implemented in 2022!
- Offer a multi-channel distribution platform to reach consumers wherever and whenever they are primed to think about insurance and seamlessly connect them to a digital buying process. Include digital messages to keep the consumer engaged and informed about the application status and next steps.
- Revamp the eApp to use behavior-based vs. reflexive questions. This will make the purchase journey intuitive and fast. Fast means less than 10 minutes from app to offer for most consumers.
- Use data differently. Data functions to knock out apps or supplement the traditional underwriting process. Using data to detect non-disclosures and rate applications behind the scenes eliminates the uncomfortable task of fact-checking the consumer over the phone and increases opportunities to price applications on the spot.
- Install AI/Algorithmic underwriting to simultaneously assess applications and make decisions at the point-of-sale. A data-driven system maximizes auto-acceptance without compromising risk and is the flywheel for the entire buying process!
- Create a feedback loop for the AI decision platform. Whether online or offline, this loop will expedite learning, improve accuracy and increase straight-through processing rates. Data can come from multiple sources; consumer buying analytics, claims, post-issue DHR requests, manual underwriting decisions, application and admin surveillance activities.
Renovating the value chain does not have to be overwhelming, particularly when using an agile approach to manage incremental change. Choosing the right partner and solution, like iCover, also helps!
Effective Life Insurance Illustration System Implementations
Over the years working on various single carrier and multicarrier illustration systems, the implementation process includes critical pieces like the functionality and the user experience. When adding life insurance products to a platform there are three areas that are key to the implementation (Calc Engine, Reporting, and User Functionality). Some features in the illustration platform are already baked in, but other features such as how to select age, riders, and strategies, just to name a few, can be sensitive in ease of use and practicality in running the illustration. What most agents and BGAs may not realize is that it is not necessarily the vendor who may be the cause of a challenging user experience, but how the carrier did their implementation. The key to a successful implementation is to have advisor and BGA beta testers in the field before the launch.
“Modern and capable Illustration systems are absolutely critical for carriers, of any size and complexity, to both drive the sales process and enable the exponential benefits of a digital ecosystem,” says Lyndon Edwards, president of illustrate inc, a leader in providing illustrations, eApp, and other digital cloud-based solutions to the North American life insurance industry.
Edwards continues, “Illustration systems are much more today than they used to be, and they continue to evolve. In addition to providing accurate, instant, compliant, and secure information, today’s systems also need to be feature rich, integration capable, and future ready to deliver customer, user, and operational experience, all critical for carriers to attract agents, succeed, and grow in today’s market. Choosing a proven illustration partner with the actuarial, industry, and technology expertise required, to understand and deliver on specific carrier needs and requirements, will ensure and provide the continued innovation, evolution, and commitment in a constantly changing environment.”
More Innovation Using Electronic Health Records (EHR)
If you read my Broker World article in February, Electronic Health Records (EHR) For Life Underwriting Surging In 2022,” then you will see the rapid expansion of how EHR is being used in the life insurance industry. AdamsBridge understands the healthcare data and pharmaceutical industry which defines their expertise to retrieve and translate medical records from an industry that uses them for maximizing healthcare reimbursement, not for the interpretation needed for the life insurance Industry.
“We are the only organization in the industry to show and document the risks of using EHR records for risk assessment in life insurance, showing variances it has in ‘missing’ data compared to legacy APS records—variances that could range several tables. It is not about your ‘hit’ rate, but the ‘useability’ rate of the data,” said Peter Iras, executive director of AdamsBridge.
Iris continued, “We further redefined the logic used by other summary/data providers with the industry’s first LOMA certified summary team. Another first for the life industry—a customer driven tier builder platform where the clients can build their own summary. Imagine getting the medical data of your choice digitized, extracted, and sorted the way you want and not by some off the shelf or plagiarized version. Data that is searchable, sortable, chronological by body part, body system, key words, diagnosis, scripts, labs, or whatever method you want to use to gain that edge. Useful reports designed by you that focus on impairments with their underlying factors, morbidity, diagnosis, prescriptions, labs, body limbs and specific body systems, delivered in any format, from any data aggregator, with even a customizable analysis focused on directional recommendations (decline or approve) for your underwriters or an underwriter snapshot so you can make easy directional decisions.”
Up until now, many InsurTech disruptors were start-ups steered by ambitious young people with impeccable technology credentials but limited knowledge and understanding of the life insurance industry. They typically arrive with a solution looking for a problem to fix and often stumble when confronted with regulatory and compliance obstacles as well as with the complexity of insurance distribution. The situation is now being reversed.