Article Synopsis :
Insurance underwriting is on the verge of a quantum leap as an increasing number of insurers are recognizing the role of data analytics and big data in risk profiling and pricing of insurance. As a consequence of the digital revolution volume of information has increased immensely but so has the power of data processing tools. Now insurers will have to handle more data together with narrower but accurate categorization for risk profiling in order to be competitive.
A White Paper by IBM on integration of data from various digital sources into the underwriting process provides an encompassing perspective on current state of data integration practices in the area of underwriting. The report discusses how the underwriting landscape is transforming across responsive insurers using various methods like:
1. Managing the collection of data
2. Integrating data insights into the underwriting process
3. Data and innovation in the underwriting process
4. Funding underwriting improvements
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Digital Insurer's CommentsRisk profiling based on behavioural fingerprinting is a key to success in the underwriting process. Insurers who can process both structured and unstructured data and use predictive analytics for risk profiling will have a competitive pricing advantage. In order to capture and harness social platforms real time data for underwriting process, insurers will have to first develop digital front end at various customer touch points.
The non-life industry is further advanced in its underwriting skills as compared to the life industry – expect a transfer of knowledge as the life industry starts to digitise the application process.
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