Better Life Insurance Risk Assessment – Cognizant
Article Synopsis :
Digitisation is changing customer expectations at a rapid pace and these dramatic enhancements in digital connectivity and technology adoption require insurers to challenge traditional boundaries and unlock the potential of innovation to improve consistency and accuracy across the insurance value chain.
In the insurance insight paper,”Better Life Insurance Risk Assessment by Leveraging Medical Innovations”, the Cognizant team highlight that insurance underwriting efficiency and accuracy can be improved if insurers successfully tap the potential of medical technology innovations such as wearable fitness devices, smart phone apps, gene tests and bio-monitor/ risk-assessment techniques such as evidence-based underwriting (EBU). The paper identifies the following application of underwriting innovations that will help insurers address the challenges related to risk mitigation and pricing:
- EBU for Precise and Systematic Underwriting
- Wearable Fitness Device Data for Health Monitoring
- Genetic Data to Boost Premium Setting, New Product Development
We like the way the paper simply maps out the EBU process:
In addition, the paper summarises very well how wearables can aid risk assessment and what insurers can do with genetic information:
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Digital Insurer's CommentsInnovation and technology adoption to create value in the insurance sector will involve an uncomfortable trade-off between creating best-in-class solutions and distributing these solutions at the cheapest possible price. In order to remain competitive, insurers will require a balanced approach that leads to customer and business value creation at an affordable cost. Having said that, skyrocketing health care costs and the increasing commoditisation of insurance products leaves ample opportunities for health insurers to innovate. We second the Cognizant paper’s view that if techniques and technologies like smart phone apps, EBU, wearable tech and bio analytics are executed judiciously, insurers will be in a position to deliver superior products at affordable prices benefiting their customers like never before.
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