Filed Under:Risk Management, Loss Control

3 InsurTech updates to the underwriting process

Is automation the future of all underwriting functions?

InsurTech startups are spurring innovation in the underwriting process. (Photo: iStock)
InsurTech startups are spurring innovation in the underwriting process. (Photo: iStock)

Insurance executives such as Andy Rear with Munich Re now embrace the power of technology to improve policies and services.

Related: When worlds collide: Insurers and InsurTech

Underwriting, Rear says in the new Quarterly InsurTech Briefing from Willis Towers Watson Securities (Willis Re) and CB Insights, is one of the most pivotal points along the insurance supply chain where automation can make an impact.

“Because all of our underwriting is automated, we can see how people interact with the webscreen,” says Rear, who is chief executive of Digital Partners, Munich Re’s venture partnership division. “We can see if questions cause them problems; and we can see where we have high drop-out rates so we can think about amending our products or underwriting. As a result of what we saw, we implemented some technology improvements to speed up the quoting process.”

InsurTech experts foresee underwriting processes becoming faster and more efficient as insurers uncover new ways to procure and apply complex data analytics.

Related: 3 best practices for collaborating with InsurTech startups

Continue on for a survey of three ways that technology and InsurTech startups are spurring innovation in the underwriting process.

Predictive modeling is one type of automated technology that can support underwriting. (Photo: iStock)

Predictive modeling is one type of automated technology that can support underwriting. (Photo: iStock)

No. 3: Simplified, streamlined policies


The inaugural Willis Re briefing pinpoints small business insurance as one arena where underwriting can more easily undergo automation than some other limbs of the insurance industry tree.

Researchers point to Next Insurance, which has raised $38.1 million in venture capital funding, as an example of an insurer that’s making smart partnerships to meet the growing need for innovative small business insurance products. “Products are simple to select and tailored based on deep understanding of the industry,” says the Willis Re briefing.

Next Insurance has partnerships with Munich Re, which is also a major investor in the company, along with Ribbit Capital, TLV Partners and Zeev Ventures.

Related: InsurTech funding dips (for now) as startups market new wares

No. 2: Enhanced mobile functionality


A better, stronger mobile application
is part of what enabled the San Francisco-based InsurTech company Trov to reportedly raise a total of $85 million in venture capital funds. The company offers the ability to insure individual possessions using its smartphone app. Policyholders can initiate coverage or change that coverage through the app.

The service launched in Australia and the U.K. with plans to expand in the U.S. this year.

"Trov’s early success in Australia and UK is demonstrating that modern consumers want a new way to protect their things,” founder and CEO Scott Walchek said in a recent press release about a successful round of Series D fundraising. “With the additional capital and extensive partnerships, soon millions of people around the world will be empowered to protect the things that enhance their lives whenever and however they want."

Some consumers are willing to provide an insurer with their own data tracker insights if it means better insurance services. (Photo: iStock)

Some consumers are willing to provide an insurer with their own data tracker insights if it means better insurance services. (Photo: iStock)

No. 1: Smarter data collection and analysis


Insurance industry technologists
argue that the difference between a modernized insurer and one stuck in the last century is the ability is procure the right data at the right time.

Consider Pillar Technologies, an emerging construction company risk management company based in New York City that makes use of digital jobsite sensors that can monitor such dangers as fire, humidity or mold. The technology was conceived to provide the exact data and analysis necessary to help mitigate damage and reduce claims.

"Construction sites are dangerous places and accidents are costly," Alex Schwarzkopf, one of the founders of Pillar Technologies, said in a July 2016 press release about the company securing $425,000 in seed funding. "Our advanced sensor-based technology benefits general contractors, insurance companies and building owners alike by significantly reducing risk and more accurately predicting damage from destructive environmental conditions."

See also:

Meet 6 entrepreneurs with innovative InsurTech products

3 reasons startup entrepreneurs love InsurTech

Insurance 2017: Priorities for innovation, automation and transformation

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