Blog & News

How to Simplify Life Insurance Underwriting in 48 Hours

[fa icon="calendar"] May 18, 2018 3:23:04 PM / by Ibeth Ramos, Sprint Facilitator

Underwriting Taster Wrap Up BannerIn the life insurance industry, there are many processes we encounter daily that have the potential to be modernized and made more efficient. The current underwriting process is no exception, with outdated rules, blanket questions that don't allow for personalization, and long customer wait times  that can take up to four to six weeks. This is a process that is ripe for disruption and last month, Cookhouse Lab invited underwriting professionals to try their hand at disrupting it in just 48 hours. 

This was done through a 'taster session' which gives professionals the chance to sample a variety of design thinking exercises that are used in regular Cookhouse Lab projects in a condensed time frame. 

This sprint in particular focused on making the life insurance underwriting process more time and resource efficient to ultimately improve the customer experience. Read on to find out what processes were used to collaboratively identify three potential solutions in just 48 hours. 


Underwriting Wrap Banner 2Day 1 - Identifying Pain Points & Determining Customer Personas

On the first day, the team focused on conducting research and empathizing with the customer to really understand their mindset. Empathy is a critical component of design thinking to ensure that the solution has the end customer's needs are at the forefront.  

Identifying Pain Points

The project team identified pain points of the demographic by running a 'masterminds' interview session. This involved meeting with a group of experienced underwriters to understand the current process from their point of view, their pain points and what their ideal process would look, feel and sound like. Through these interviews, the team identified the following pain points:

  • The current process has too many irrelevant questions
  • There lies a big gap in communication between the agent, insurance company, and the end customer
  • All age groups are being treated the same and asked the same questions
  • Data exists, but it isn't accessible
  • The current application needs to be more dynamic


Determining Customer Personas

The team also identified two main customer personas that the solutions would be targeted towards:

Sam:

  • 27 year old female that is living with her parents at the moment, but planning to have her own home one day and start a family
  • She is commitment averse and prefers to avoid face-to-face communication when dealing with purchases
  • She enjoys social media and instant gamification.


Chris:

  • 45 year old underwriter who has worked in the same organization for 20 years
  • He has a 15 year daughter and a 3 year old son.
  • He likes his way of doing things and is worried about automation
  • He believes in the power and value of underwriting and likes the medical knowledge he has acquired throughout his career
  • He is comfortable with the current system and is the type of person that feels the need to read every line on applications

Underwriting Wrap Banner 3Day 2: Developing Solutions

Using the research from Day 1, the project team continued their sprint on Day 2 to develop three possible solutions to better the current process.

Solution #1: Instant data collection, verification and clarity of product

This solution allows the agent to ask for permission from the customer to access various data pools that have collected valuable customer data, which would then be sent to a pre-filled application. Once the application is completed, the customer and agent would look over the information provided. At this point, the customer could make any necessary changes, edits or provide any missing information. Once  the customer authorizes the application the agent is then able to provide possible policies based on the information given, which provides a custom solution that fits for each individual customer. 

Underwriter Benefits Customer Benefits
Instant and authorized access to the data pool Peace of mind on how the agent is collecting information
Clarification on information collected A better understanding of what information the agent is collecting
No need to go over the entire questionnaire, which may hold irrelevant questions Clarity on the value of their policy
  Allows for the opportunity to ask questions without lengthy waiting time periods

Solution #2: Simplified Application - Max 10 Qs

Instead of a standard application, this online question solution would contain a maximum of 10 key questions that customers are asked. The questions would have smart logic and adjust depending on the respondent's answers and would prompt the user it needs further information. In addition to being more efficient, this solution is also millennial friendly as it allows the target group to skip lengthy unnecessary and/or irrelevant questions. Key question categories:

  1. Lifestyle (Alcohol consumption, Drug use, Driving history, Criminal activities)
  2. MIB report
  3. Medical related (prescription medication)
  4. Foreign travel
  5. Immigration status
Underwriter Benefits Customer Benefits
Shorter application process Clear and relevant questions
A questionnaire that is adaptable, and therefore relevant for all customers Shorter application process

Solution #3: Starter Plan

A product designed for university graduates and parents with children in university. Starter Plan is designed to be marketed through universities during orientation and months leading to graduation, student loan distributors and entry level employers. The plan would be based on:

  1. DI protection
  2. 50K coverage for 2 years
  3. Financial education
  4. Personalized dashboard with incentives and possible products as the life of the customer changes
Underwriter Benefits Customer Benefits
Financially educated customers Financial education
Data collection from an earlier age More accurate and customized products
Engagement from the millennial generation Parents have peace of mind regarding insurance and their young adult's coverage
  Parents have peace of mind knowing that they've set their child up for a good start.

Underwriting Wrap Banner 4Unlocking Innovative, Disruptive Ideas in 48 Hours

In just two days this project team was able to create three viable solutions to solve an industry wide problem - which is a huge accomplishment! Through these solutions, they were able to achieve the following: 

  • Offer an efficient and speedy process to underwrite a policy
  • Engage the most challenging age group for life insurance to attract at the moment (millennials)
  • Build customer trust and financial literacy

Want to join in on the innovation? We've got a full schedule of projects coming up in 2018. Check them out here!
check-innovation-projects

Topics: innovation, design thinking, underwriting

Become an industry thought leader. Don’t forget to share.