- Are you a tobacco smoker?
- Do you regularly consume alcohol?
- Does your family have a medical history?
- Have you recently traveled abroad?
These are the types of questions your insurance company will ask when you apply for a life insurance policy.
The primary goal of a life insurance policy is to provide financial support to you and your family in the event of your untimely death. However, before offering substantial coverage, the insurance company needs to assess the applicant’s risk profile. Essentially, they aim to determine one crucial factor: how long is the applicant likely to live?
To answer this, the insurance company collects detailed information about the applicant’s medical risk profile and financial stability. Based on this analysis, the insurance company decides whether to provide coverage, how much coverage to offer, and at what premium cost.
This information-gathering process is known as “life insurance underwriting,” a standard procedure followed by every insurance company before granting life insurance coverage and companies use life insurance underwriting software to gather this data quickly.
What Is Life Insurance Underwriting Software?
Banks and insurance companies use life insurance underwriting software to assess the risks involved in making loans or providing insurance. The software automates the steps in determining eligibility, interest rates or premiums, and whether to accept or reject an application.
This software is essential for banks and insurance businesses because it expedites risk assessment, improves pricing accuracy, and streamlines the entire process.
Organizations can reduce costs, adhere to rules, and improve customer satisfaction by automating these processes.
What Are The Benefits of Investing In Life Insurance Underwriting Software?
The pandemic has shown how important good insurance coverage is for families and life planning. Because of this, global life insurance companies must make sure the customer experience is as smooth as possible from start to finish.
One of the best ways to do that is to invest in high-quality life insurance underwriting software. Let’s see how this technology will benefit insurers and customers alike in the short and long run.
1. Attract More Customers With A Digital Experience
Technology changes constantly, raising consumer expectations. With ideas like the metaverse becoming more common, people now expect all companies to be digitally savvy.
Insurance companies need to keep up with these changing demands. An automated underwriting system helps insurers reach customers where they are: on their digital devices, likely trying to complete many tasks each day.
By meeting the demand for innovation, insurers can improve their reputation as modern industry leaders, attracting more customers and continuing the cycle of growth.
2. Improve Customer Conversion Rates By Reducing Entry Barriers
Today’s process of buying a premium has many obstacles. This leads to many potential customers losing interest before completing their purchase.
The problem lies in the underwriting process, which often includes long lists of repetitive questions and even medical exams. These time-consuming and intrusive steps are major deterrents, especially when customers are used to buying other products and services online in seconds with a click.
Automated life insurance underwriting software simplifies this by reducing the number of questions and the amount of information needed. This allows customers to buy life insurance in minutes instead of hours or days, improving the overall conversion rate.
3. Install And Use Quickly and Easily
Despite what many think, using automated life insurance underwriting software to improve the customer experience doesn’t require a big internal overhaul.
These new tools are ‘plug-and-play,’ meaning insurers can quickly and easily set the rules and parameters based on their existing models.
They can also update them without needing IT or programming help, adapting quickly to changes in regulations or health situations. This flexibility allows insurers to respond faster to new risks, like those from unexpected crises such as a pandemic.
With digital and cloud-based capabilities, deploying an automated underwriting system is simpler because it doesn’t require staff to be on-site for integrations.
4. Lower The Chances of Human Error and Discrimination
The insurance industry depends on underwriters to balance avoiding profit loss by managing risk and maximizing profit by processing new customers. This is challenging and often influenced by personal opinions and human errors.
Using AI and Machine Learning (ML), automated underwriting systems help insurers improve objective risk analysis. These systems detect patterns and connections in application responses that are hard and time-consuming for humans to see.
With insights from these data points presented in easy-to-read messages, insurers can quickly make better-informed, fairer underwriting decisions.
Final Words
Jumping on board with automated life insurance underwriting software is a smart move for insurance companies and customers alike. These tools make applying for insurance easier, cut down on mistakes, and improve everyone’s experience. With AI and Machine
Learning in the mix, insurers can make quicker, fairer decisions, which means smoother operations and happier customers. Today, automation isn’t just a trend—it’s a must for keeping up and giving customers what they want.
