As our industry shifts from indemnity to protection products, digital technologies will be essential to providing differentiated experiences that leverage these platforms and ecosystems to capture opportunity from new product innovations. We believe product and underwriting innovation will provide a significant source of revenue over the next several years. However, it will require expanded use of AI, automation, data analytics and cloud to profitably drive revenue.

As insurers modernize their legacy core systems, freeing siloed data, they’re able to automate their underwriting workflows to provide a faster digital buying experience, while connecting to additional data sources that help them apply the appropriate level of risk management. Not only does this shorten underwriting timeframes and reduce costs, it also improves the customer (and underwriter) experience. Likewise, it supports the advanced experience consumers are looking for—seamless, proactive, and personalized.

According to a Gartner® report (Richard Natale, Kimberly Harris-Ferrante, August 2022), “By 2027, digitally engineered underwriting will have reached mainstream adoption in the life insurance industry, resulting in significantly increased revenue and underwriting profitability and improved customer experience.”

3. Human + Machine operating models will help alleviate underwriting skills shortages

Digital technologies such as AI and automation are not replacing underwriting jobs. On the contrary, these technologies will become even more necessary as insurers face continued skilled labor shortages. Moreover, they will need a talent and investment strategy that targets digital skills in data analytics and no-/low-code capabilities along with the use of flexible workforces to optimize the underwriting function.

For example, with the growing use of third-party data, AI and automation provide an efficient way to ingest data and make it useful to underwriters. This frees underwriters to do what they do best—assess and price risk—while driving timely, effective decision making. What’s stopping them is the administrative work that takes up 40 percent of their time, according to our survey of 500 U.S. life insurance underwriters.

The first step is to improve the efficiency of back-end underwriting operations. Interoperability is key to simplifying all customer-facing functions including product distribution, marketing, sales, service and commerce in addition to using an integrated technology stack across platforms and ecosystems. The cognitive platforms described above can help here too. As insurers improve their digital capabilities to quickly address consumers’ ever-changing needs with even more discrete insurance products and distribution channels, underwriting capacity will have to keep pace. This human + machine combination can facilitate a better experience for underwriters and potential policyholders.

This is good news for the insurance value chain and further reinforces my optimism about our industry and insurers’ abilities to meet the challenges and opportunities that lie ahead. We’re prepared to help. Let’s talk about getting the most from your technology and human ingenuity.

Fuel the future of insurance: Technology modernization, such as AI and cloud-fueled data analytics, helps insurers deliver profitable growth both through growing revenues and cutting costs.