The End Of The “Old” Electronic Proposals Is Approaching

Most insurers in North America plan to reduce their use of offline paper and electronic applications (digitized paper) in less than two years. They will move more and more to the Internet proposal, reveals a large study of the Society of Actuaries (SOA) published in December 2017.

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Multichannel distribution

These proposals are available on computer and tablet, and on smartphones in 19% of respondents.

Nine of the 13 respondents indicated that they received between 1% and 40% of their Web proposals from the independent network (independent advisor, general agent, securities firm), of which seven accounted for 1 to 20%. Three respondents say that this proportion reaches between 81% and 100% from the independent network.

The companies surveyed use a multiplicity of distribution networks, including direct online sales, the securities network, and integrated financial services. The two dominant networks among respondents are brokerage by advisors or general agents and the captive network. The majority use more than one distribution channel (62%), and two respondents reported using five or more channels.

More analytics

According to the report, a challenge continues to plague the industry in new business: how to subscribe faster and better for less. It appears that lowering their rating requirements will be the preferred avenue for SOA survey respondents. Many plan to add predictive analytics capabilities to their pricing methods or improve their capabilities.

More than half of insurers reported using an automated pricing system that can make decisions. More than a third who are not already there are planning to be there in two years. Of the system users, over half have opted for a custom external solution or have developed their own system.

With changes in pricing, about a quarter of respondents indicated that their company was able to approve 90% of insurance proposals in less than 30 days (80% for more than half of respondents). Among the most prominent changes are age and insurance amounts, as well as automated pricing systems.

Medical tests at the door

The desire to add credit score requirements is closely following the additions expected by underwriters to accelerate underwriting while minimizing risks and costs. SOA survey respondents also plan to increase their non-medical requirements, the use of drug prescription databases and remote interviews.

In contrast, the medical examination emerged as the most likely required to be dropped. Insurers surveyed also plan to reduce the use of paramedical exams, blood profiles, and electrocardiograms. They also do not plan to use dried blood samples and oral fluids.

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The study comes on the heels of that of the Reinsurance Group of America (RGA), according to which 68% of insurers expect to invest to improve the efficiency of their underwriting processes in the next three to five years.

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