As the insurance industry continues to navigate the pace of change, complexity and uncertainty in our world, consumers continue to respond, expecting companies to be more responsive to their needs.

1. Evolving cognitive technologies will help insurers capture opportunity from more discrete market segments

Technological advances in AI and data analytics are helping insurers further refine market segments. As these more discrete segments grow, so too does the opportunity for insurers to address them with new products and services offered through a wider range of digital distribution channels. One such channel is embedded insurance—placing insurance in the customer journeys of non-insurance companies—for example, offering life insurance during the process of applying for a mortgage.

New cognitive insurance platforms underpin these new products and distribution channels providing life carriers with a way to capture that opportunity, and as these platforms evolve, they hold tremendous potential for the underwriting function. Already, these insurance platforms are automating evidence gathering and providing recommendations based on a continuously updated data analytics engine. With this level of automation and intelligence, underwriting decisions can be made in real time. Those cases requiring further scrutiny are then automatically referred to a human underwriter. With much of the evidence gathering already completed, the human underwriter is free to focus on further analysis, leading to more efficient decision making—a clear competitive advantage in fast-moving digital distribution channels. We believe innovation in this area will continue to evolve over the next year. In fact, our report Fuel the Future of Insurance describes on page 11 how a life insurer in China is improving operating efficiency and customer experience by leveraging AI and a smart algorithm.

2. Customer experience will continue to drive underwriting innovation

In last year’s underwriting predictions, I discussed how customer experience will determine who wins the digital competition for new business. We expect this trend to continue, but with a heightened awareness of consumer expectations and how insurers can respond more quickly to their changing needs. For example, our Accenture Insurance Consumer Study research identified that millennial and younger consumers aren’t the only cohort embracing a digital experience. The 55 and older cohort is becoming more comfortable with digital interactions. And if insurers are to attract and retain customers, a digital customer experience is table stakes. Underwriting plays a pivotal role in supporting the digital customer experience, especially with the proliferation of customer experience technologies available through ecosystem partners.