By Bill Walasek, Head of Sales, Paperless Solutions GroupNovember 6, 2023
The 20th Annual LIDMA Conference & Showcase continued its tradition of providing great content and insights. The Paperless Solutions Group (PSG)/MIB team always appreciates the opportunity to be with a group of our clients, partners and other industry companions to share great conversation, gain insights and stay on top of the latest industry challenges. This year’s LIDMA theme, The Distribution Revolution, was more than on target as our industry is going through some rapid changes. Don’t laugh, yes, the life insurance industry is going through rapid changes and adapting!
The topics that were on the forefront of everyone’s mind at this year’s conference included automated underwriting, artificial intelligence, and mergers/acquisitions to name just a few. Here’s my key takeaways on each of those themes.
We all know the aim of an automated underwriting (AU) system is to reduce the effort, time and/or data necessary to underwrite a life policy, while maintaining the quality of underwriting decisions. More and more carriers are introducing or have introduced an AU system. Distribution values these programs since they create an enhanced customer experience. The carriers and distributors I spoke with at LIDMA cited that about 30-35% of cases submitted through AU are placed, which is great. The question then becomes, what is happening with the 65-70% of the cases that are not placed? What can be done to help move those prospects along and get those policies placed? Carriers are beginning to address this and are looking at options to help them solve this challenge.
This is a key area where PSG can help. Quoting cases accurately and directing clients to the ideal carrier’s underwriting platform the first time will help improve acceleration rates. Using PSG’s eValuate multi-carrier underwriting rules engine to assist in the field underwriting process will improve accuracy and, therefore, the likelihood of success, thereby also improving the overall customer experience.
You can’t have a conversation about rapid changes in the life insurance industry without artificial intelligence (AI) being mentioned. And rightly so. It is clear that the industry is still trying to get their arms around how to use AI and the best way to do so. The industry is only beginning to explore the possibilities for AI use cases in fraud detection, data analysis, underwriting processes and risk assessment, as well as predictive analytics.
With the use of AI comes challenges around the possibility of unintentional bias. Regulations are emerging at the federal and state level that will impact how AI driven algorithms and predictive modeling are used in life insurance underwriting. MIB has taken a leadership role in educating the industry on the challenges surrounding data biased governance and the regulatory landscape, and our legal team has presented on this topic at several conferences over the past year, including LIDMA. A key message: The time is now to get your external resources lined up and budgeted for 2024 compliance with emerging governance and testing regulations.
Mergers and Acquisitions
The industry is consolidating. Carriers, distributors, and vendors are all being impacted by mergers and acquisitions. Consolidations take place to address all sorts of business challenges, whether to address short term gaps or long-term goals, expand or consolidate product offerings, achieve efficiencies through vertical integration, improve economies of scale and more. Regardless of the reason, the insurance community’s future is being shaped by M&A and all must be ready to adapt to it.
When companies with disparate systems come together under a merger or acquisition, efficiency goals may not be realized. Many larger and newer IMO’s are growing through acquisition and are challenged with this problem. As a result, they are looking to replace these disparate systems with a consistent workflow for their agencies. One that is flexible and customizable to meet their evolving needs. This is another area where PSG is ideally situated to help. We work with our clients as partners, customizing our products to meet individual needs. At the same time, our products are scalable - so they can grow with you.
These examples are just the highlights of the key challenges discussed at LIDMA 2023. We believe that companies who invest in solid, yet flexible and sustainable solutions will be best positioned to adapt to the changing environment and take on these challenges. As you navigate the rapid pace of change that our industry is experiencing, working with a partner who can grow and flex with you be critical, and PSG and MIB are here to help.
Bill Walasek is the Head of Sales for Paperless Solutions Group (PSG). Prior to joining MIB in December of 2021, he held sales and marketing roles with vendors, distributors, and a carrier all focused on the life insurance market. These experiences allowed Bill to see the industry from many different angles in addition to developing relationships that bring great value to PSG. Bill graduated the University of Georgia with a degree in Risk Management and Insurance and is involved in many industry committees.