When it comes to life insurance, many millennials understand the financial risk of not having it — the need — but might not be aware of what kind of policy they need or how to procure it. Current obligations, like student loans, mortgages and other debt, also can be roadblocks. It’s about affordability and share of the wallet. Equally inhibiting are the lack of awareness about what they need to secure their financial future and how to go about doing that.
As I’ve learned while leading digital transformation at my company, technology could help clear several of these roadblocks and enable insurers to create a personalized customer experience that includes awareness of policy issues and ongoing engagement. Artificial intelligence, specifically machine learning on rich data sources and natural language processing, and an integrated environment driven by an application programming interface are the key technology components in this context.
Let’s get to the roots of life insurance: What’s the purpose? At its core, insurance provides peace of mind. This fundamental realization will help insurers navigate the roadblocks and be available to help millennials meet their financial needs through a simple and intuitive approach. Here’s how technology can help remove some of the roadblocks for millennials who want life insurance.
A simpler and faster application process: The process of data collection and underwriting could be simplified, specifically for low-face-value policies. Instead of consumers filling out applications, insurers, with consumers’ consent, could prefill the application with data from different sources. Insurers could start integrating with the increasing number of data aggregators from either personal health records or data from health exchanges. A competitive risk score algorithm could be modeled based on regulatory and the insurer’s underwriting guidelines. A rules engine-based solution combined with the risk score could automate the underwriting process. There are also other innovative solutions now available to automate underwriting. For instance, Chronos from Lapetus Solutions simplifies underwriting by using selfies. With an open architecture, insurers can integrate with a partner ecosystem through which standard APIs could realize quote to policy issuing in less than five minutes.
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