Underwriting technology trends 2023: what to expect
As technology evolves, so does the underwriting process. In the next five years, we expect advancements in AI-driven automation, digital documentation solutions, machine learning algorithms for risk assessment, and blockchain technology for identity verification. By leveraging these technologies, insurers can improve their efficiency, accuracy, and customer service, leading to greater profitability and market success.
As technology continues to evolve and become more sophisticated, here’s what you can expect from the underwriting tech trends in 2023:
Artificial Intelligence and Machine Learning
AI and ML are starting to play a significant role in underwriting processes, enabling faster and more accurate decision-making and risk assessment. Technologies such as machine learning, natural language processing, and image recognition will allow insurers to analyze submissions more quickly and accurately.
In addition, AI helps insurers identify patterns in large amounts of data, empowering underwriting departments to make better decisions about pricing and the structure of policies.
We expect to see insurers increasingly taking advantage of AI-driven automation to improve the end-to-end underwriting process, allowing customers to get quotes faster and with more accurate pricing. AI can be used to automate mundane tasks such as data entry, which can free up resources for more complex work. This will lead to significant cost savings for insurers in the long run.
In addition, AI-powered technologies help insurers detect fraudulent activities and reduce the amount of time spent on manual processes.
The bottom line: AI-driven automation of underwriting processes will become more common in 2023 and beyond.
In underwriting, the focus is shifting to using data and predictive analytics more effectively to improve customer risk assessment. Machine learning algorithms are becoming increasingly important as they provide insurers with the ability to analyze large amounts of historical data quickly and accurately.
This type of analysis empowers underwriters to better understand how certain factors impact the likelihood of a claim, allowing them to precisely rate policies to develop more accurate pricing models. By leveraging predictive analytics, insurers significantly reduce risk exposure and ensure that valuable long-term customers are identified and serviced efficiently.
The bottom line: predictive analytics is becoming an essential tool for underwriting, enabling better pricing and efficiency gains for insurers.
Digitalization of manual underwriting processes
The trend toward digitalization of underwriting processes will continue, with a strong focus on streamlining workflows and reducing manual effort across the policy lifecycle. We expect to see more insurers embracing digital technologies such as APIs and chatbots to automate the underwriting process and integrate it with the rest of their business.
Digital document submission solutions such as electronic signatures and digital forms will become more commonplace in 2023, allowing customers to quickly submit documents electronically instead of emailing or faxing them. This will reduce the administrative burden for insurers, making the underwriting process simpler and faster.
The bottom line: Digitalization will make it easier for customers to apply for coverage, allowing them to submit documents online and receive an automated response in real time.
Data-driven risk assessment and pricing
Insurers are focusing analyzing customer data more accurately and quickly to make better pricing and risk management decisions. This will lead to more accurate customer pricing and improved profitability for insurers.
Data-driven underwriting could also provide opportunities to improve customer service. By analyzing customer data, insurers can deliver personalized products and services that better meet the needs of their customers.
The bottom line: with the increasing amount of data available to insurers, we expect to see a greater focus on data-driven underwriting in 2023.
Integrations with other systems
Underwriting technology is increasingly integrated with other systems, such as customer relationship management (CRM) and policy administration systems. Integrations enable insurers to provide a seamless customer experience and reduce the need for manual entry of data. Data from all these systems combined is then used to inform decisions about pricing, risk management, and customer service.
The bottom line: We expect greater tech-driven collaboration between underwriting departments and other areas of insurance, such as claims and policy processing.
Cloud-based underwriting solutions continue to gain traction, offering scalability, accessibility, and lower costs. Cloud solutions empower insurers to store and access data remotely while also benefiting from the latest security protocols.
The bottom line: In 2023, we can expect to see more insurers migrating their underwriting systems to the cloud to take advantage of these benefits.
Real-time data access
Real-time access to data is becoming increasingly important. Insurers can tap into data from social media and databases, allowing underwriters to make informed decisions quickly. This will lead to improved customer service, faster turnaround times, and cost savings for insurers and customers alike.
The bottom line: Insurers that embrace real-time data access can gain a competitive advantage over those that do not.
Increased use of automation
Automation will continue to play a significant role in underwriting processes, reducing manual effort and increasing efficiency. We expect to see more insurers using automation to process customer data, detect fraud and automate mundane tasks. This will contribute to significant cost savings for insurers in the long run.
The bottom line: Automation will enable insurers to reduce costs associated with manual processes.
Focus on customer experience
Underwriting technology is increasingly focusing on improving the customer experience, concentrating on improving digital and self-service capabilities. Insurers are striving to offer customers more personalized products, speed up turnaround times, and improve the quality of service. This efforts are likely to result in improved customer satisfaction and a competitive edge for insurers.
As insurers are exploring new ways to make it easier for customers to obtain quotes and purchase policies, a key trend that is gaining traction is utilizing no-code front-end technologies to provide customers with more personalized, seamless experiences.
The bottom line: Insurers that invest in underwriting technology to improve the customer experience can gain a competitive edge and increased profitability.
Increased use of telematics
The use of telematics, such as GPS and sensors, is rapidly becoming an important tool across the board, helping underwriters to better understand and price risks.
The bottom line: We can expect to see more insurers leveraging telematics to gain a better understanding of risk.
Digital Data Collection
As the insurance industry continues to evolve, digital data collection will become increasingly important. Insurers need to find user-friendly ways to collect information on potential customers to better assess risk and make informed decisions.
The trend towards digitalization can also be seen in the area of document verification. Insurers are already beginning to explore ways to digitally verify documents such as driver’s licenses and passports. The ability to quickly and accurately verify a customer’s identity without relying on physical documents or manual processes is a significant cost saver.
E-signatures and digital processes are making it easier for customers to apply for coverage and get their policies quickly, further enhancing the customer experience.
The bottom line: Digital data collection will help insurers obtain more accurate information on potential customers in a user-friendly way.
Underwriting technology will continue to evolve in 2023, with a focus on digitalization, data-driven underwriting, cloud solutions and improved customer experience. These advancements will help insurers make better decisions and reduce costs associated with manual processes. Digital data collection will allow insurers to obtain more accurate information on potential customers, enabling them to better assess risks and offer personalized products.
As the industry continues to evolve, it is essential for insurers to stay up-to-date on the latest underwriting technology trends in order to remain competitive and profitable. By leveraging the right technology, insurers can gain an edge in a highly competitive market.
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