Through what’s now become a very long career, I’ve served in multiple Underwriting roles–but always on the carrier side of the table. Now, I’ve jumped to a vendor who services the underwriting profession, an Insurtech called DigitalOwl who has developed Natural Language Processing (NLP) for medical records.
Since I joined DigitalOwl, I’ve spent a lot of time explaining how Underwriters do their job and how our product can help solve the real-world challenges Underwriters face every day. I even put a few slides together titled “What Underwriter’s Want”, a tongue-in-cheek allusion to the movie “What Women Want”.
Mel Gibson stars as Nick, a cocky advertising executive who develops the ability to hear what women are thinking. But, the real magic occurs when he actually starts “listening” and even trying to help his female peers achieve their goals.
Like Mel, the insurance industry–and a growing slate of Insurtechs–are listening very hard to What Underwriters Want; because there is a growing appreciation for the knowledge and experience Underwriters bring to the table.
So, what do Underwriters want? The answer is certainly not one-size-fits-all, but most Underwriters are facing similar challenges as they look for solutions to help their carriers compete in today’s highly competitive market:
Consumer demand for a streamlined–and even an instant purchase experience–but at a competitive price
Increasing competition from insurance startups who aren’t saddled with legacy systems and high corporate overhead
High demand for increasingly scarce underwriting talent
And the opportunity to employ intriguing data sources and underwriting techniques–but too often with increasing scrutiny from regulators and sometimes even our actuarial peers
We’re all on a Grail Quest for a customer-friendly, low-friction process. Yet, to compete, we still need to drive solid mortality and make sure our underwriting approach is accepted by the public and regulators.
Easy right? Nope.
We’ve seen a lot of advancement in recent years including the advent of new data sources such as EMR (Electronic Medical Records), health insurance claims data, clinical lab data, and predictive models based on public records.
But, ironically, one of the biggest challenges underwriters face is TOO much data. Underwriting files are larger and more complex to analyze than ever, but that doesn’t mean carriers have seen improvement in mortality. Many carriers have found when they reduce or even eliminate Attending Physician's Statements (APSs) and blood profiles, mortality takes a hit. Those of us who have been in the business for a long time aren’t surprised; we know there is tremendous protective value in some of the very sources that unfortunately drive the most friction.
At the end of the day, underwriting is about data. You can’t make good decisions if you don’t have sufficient data.
The carriers who will win this race are those who figure out the best data sources–and how to acquire and deploy those sources in the simplest process possible–even if that means the process may take a bit longer than we’d like.
And as carriers seek to enhance their mortality (and ultimately pricing), they also need to look at solutions that will allow them to analyze their inforce block for mortality insights. This can help carriers gain competitive advantage by sharpening their mortality assessments and perhaps even finding scenarios where ratings can be liberalized
So, what’s an Underwriter to do? Innovation is hard, but I think the industry is generally on the right track. Success lies in finding the best data sources–and the best sales and underwriting process for consumers. And then, we need to help our Underwriters by providing solutions to help them to analyze and synthesize the proliferation of data they’re faced with.
The industry has made a lot of progress over the past 5-10 years, and I believe we’re only going to see more in the next five. Our Underwriting Professionals are the key to helping carriers achieve progress in the right way to help ensure we’re designing a process that delivers high quality mortality results, competitive pricing, and a low-friction, customer-friendly process.