In Today’s time where we see everything digital, we do everything online, whether it’s ordering a food, buying clothes or investing in insurance. The last point bears a closer examination as it’s only in the last couple of years that we’ve seen an insurance become an increasingly digitized experience from end to end.This evolution has been long overdue!
Digitization is the need of the hour going forward and any efforts in that direction will not even smoothen the acquisition and on boarding process but also help for penetration and retention.
Traditionally, Insurance Agents were used for data collection, prospect’s profiling,and insurability before the formal underwriting process began. Insurance Agents would walk in door to door to compile necessary information about the prospects profile like their Income, Health, Occupation, House Ownership, Cars etc.
Digital Field Underwriting.
Modern business world is completely data-driven & digitalized, entire industry has sprung up to fulfill all the necessary data points the companies require. For insurance companies, the most critical data for underwriting an applicant remains the same. Example: Personal Information(where they live, the occupants of the house, their ages), Financial Information (salaries, occupations, household income, mortgage data) and Medical Information.
By having access to this data in hand & easily accessible in the process, Insurance companies can instantly assign applicants to appropriate product classes, as well as make a provisional decision on whether they can offer coverage.This is known as Digital Field Underwriting.
Insurance companies have two ways in setting up this process. First, they can set up an in-house data collection and storage system for processing the enormous amounts of data that is required. This option will give direct control and oversight of entire data system. However, during current times, when data needs are growing day by day, this can be a huge undertaking that can quickly burden the in-house team to handle due robust data management requirements.
The second option is to partner with a third-party intermediary that already has an extensive data storage system in place. This will come at a cost, but it will give the utmost flexibility for expanding the data needs.
Even as we look to the future of the life insurance industry, it’s also worth looking back to see how it has changed and evolved over the years. The disappearance of door-to-door sales agents may have been a history, but there’s no reason to think we can’t re imagine some age old practices for the new era. Field underwriting is one such example of an industry practice that needs to come back in a new format.