When underwriters get their work wrong, insurers run unnecessary risks, which is why accuracy in underwriting is paramount. Traditionally, the underwriting process has been lengthy, as human staff poured over applicants’ details and data from industry-approved third parties.
However, today’s consumers are accustomed to ordering products and services of all kinds instantly over the Internet. So, how can their need for fast service be reconciled with providers’ need for careful underwriting?
The good news is that cutting-edge AI-based machine-learning technologies can make obtaining insurance a breeze, even while providing highly accurate risk assessments that protect providers. Indeed, a new life insurance platform called iCover enables people to obtain the right life insurance policy for their families in only five minutes.
The challenge of streamlining an arduous process
A large percentage of Americans lack life insurance completely or are underinsured. According to The Motley Fool, approximately 106 million Americans say they don’t have adequate life insurance.
“Part of the reason for these dismal numbers is that just getting people to apply has been difficult,” Hari Srinivasan, founder and CEO of iCover, explains. “People have needed to be highly motivated to endure the traditional application process, which usually dragged on for weeks and often involved an exam and medical testing.”
The conventional underwriting process usually takes as long as eight weeks, as reported in NerdWallet.
“Submitting to an inconvenient application process and then waiting for weeks is the opposite of a good customer experience,” Srinivasan points out. “Today’s customers can get takeout delivered to their doorsteps before the food gets cold, place an order on Amazon and receive the package later that day or the next, or book a vacation rental in the time it takes to figure out which property they prefer. The CX for life insurance needed to improve, so that’s what we did.”
As Srinivasan explains, iCover leverages a great online journey and smart underwriting to produce an instant offer in only five minutes. The platform’s first groundbreaking innovation serves to speed up the customer’s disclosure process.
How iCover speeds customer disclosures
Using reflexive questions — the follow-up questions that appear when the applicant makes an initial disclosure — is standard practice in the underwriting industry, but iCover does away with these.
“People tend to hate reflexive questions,” Srinivasan explains. “With reflexive questioning, when you share that you have a medical condition, up to 15 more questions appear, requiring you to divulge even more sensitive information about the issue. It’s an unpleasant experience.”
Using sophisticated methods drawn from the field of behavioral science, iCover dispenses with this type of questioning. “Our interface is designed to ask one and only one question about any given medical condition an applicant discloses,” Srinivasan says. “It’s a multiple choice question that indicates how severe the condition is.”
According to Srinivasan, iCover’s proprietary disclosure system, named QUITM, is not only quick and easy to navigate but also produces more accurate results for underwriting purposes.
“Traditionally, underwriters have asked reflexive questions to try to get the most accurate information possible, but the thing about all this extensive questioning is that it actually encourages people to hide important information,” Srinivasan says. “In that way, the conventional approach actually sabotages itself.”
How iCover speeds underwriting
Another way iCover’s technology is disrupting the life insurance industry is through its AI-driven underwriting process.
“Our system takes into account the customer’s answers and third-party data and immediately crunches the numbers to derive an instant offer,” Srinivasan explains. “It’s an automated, straight-through process, so the customer gets an immediate response on their application.”
The ability of iCover to provide instant offers presents people with all their coverage options, not just the ideal package. “The hard truth is that some people can’t afford the ideal coverage amount,” Srinivasan points out. “That’s why we designed our system to give the full selection.”
In this way, consumers can understand their life insurance options and make an informed purchasing decision on the spot.
“To put that timeframe in perspective, consider how long it takes you to take a shower or make a meal — those things probably take a lot longer than five minutes,” Srinivasan says. “Indeed, you can probably even get your instant offer for life insurance while multi-tasking.”
Risk assessment is a fundamental part of underwriting, and iCover’s revolutionary system also ensures each application is fully vetted. After the customer completes their disclosures and receives their instant offer, the system draws from approved third-party data sources to verify that the application is accurate and complete.
“In the vast majority of cases — approximately 80 percent — this vetting process produces a final offer that aligns with the initial quote,” Srinivasan says. “Only in a few cases do we need to make revisions.”
Blazing a trail for the future of life insurance
As technology advances, the insurance industry is changing to make the customer experience better than ever. Today’s AI can streamline consumers’ purchasing journey while also protecting insurance providers from needless risk. In these ways, iCover’s innovative AI-based system blazes a trail for the future of life insurance.
