More to underwriting than speed

If you ask most Australians about life insurance, they’ll acknowledge it’s important to have but also that it’s a complex topic and they don’t know where to start. When life insurance isn’t easily understood it can erode a person’s confidence and trust, resulting in people not engaging with their cover.

It’s widely known that a large underinsurance gap exists in Australia¹ . For life insurers, this inertia provides a challenge for us to engage Australians and help them access a suitable level of cover for their lifestyle and needs, a challenge not always helped by starting with what can be a slow, complex and confronting underwriting process.

First impressions matter, which is underwriting is a moment of truth since usually it’s the first interaction a member has with their insurance. This reinforces the importance of underwriting as a strategic focus for TAL and a key touch point in delivering a leading member experience. Often the focus on underwriting has been about speed and efficiency and how we can increase straight through processing (STP). This is clearly important, but we believe the industry should look beyond speed and examine the overall experience. Speed is just one factor, along with bringing simplicity and confidence to this journey, that can drive a better member experience.

Speed: thinking beyond STP 

TAL is implementing a raft of initiatives to improve the STP rate as it is an important driver of speed. This includes automatically accepting applications with simple exclusions, for example, for members with back or knee problems but who are otherwise healthy. TAL is also utilising data and artificial intelligence (AI) to drive speed through ROSIE, our machine learning tool that predicts the outcome of underwriting decisions. This AI solution developed by our in-house data scientists, identifies referred cases from the underwriting rules engine that our machine learning algorithm can automatically accept without the need for intervention by a human underwriter. 

However, we want to shift the conversation on speed to better reflect the overall time it takes to make a decision. That quickly brings to the fore two other important factors relating to speed – digital enablement and tools to support underwriters on members' applications that do get referred. Consumer expectations of a digital experience continue to rise as is true in other industries. We see that moving from paper to digital underwriting applications can remove traditional barriers members may encounter. For example, we can reduce the number of questions a member has to answer though reflexive questioning and making tracking available so a member can follow the progress of their application. We have already seen the difference digital engagement can have, with an uplift between 200-300% in application volumes when our partner superannuation funds introduce our digital experience. Likewise, digital applications are processed on average three times faster than those on paper.

For those members that do get referred to underwriters for assessment, various manual interventions are inevitable. However, we believe that we can speed this process up through supporting underwriters by both removing some of the administrative burden with workflow tools and providing decision support tools. A great example of this is ROSIE Express, an adaptation of our AI tool that supports underwriters in their decision-making.

Focusing on member experience enhancements

Although underwriting is a risk assessment process for the insurer, it’s also an opportunity to create value for members. This can be achieved by creating a simpler, more transparent experience to enhance members’ understanding of their cover and give them assurance that we will be there if and when they need us. Part of the value of insurance is the resulting ‘peace of mind’, but that is only true if members understand and have confidence in their cover.  

The benefit of this is that members are likely to be more involved and making proactive choices about their level of insurance – whether it’s increasing or decreasing their cover. As touched on earlier, applying for life insurance may appear complicated, and often this is to do with the volume of questions and the way they’re presented, so we’re exploring how we can simplify things where we can. By triaging applications and asking as few questions as possible, we can tailor and simplify the journey for most members. 

Even if we get all of the above right, we know some members are still going to get stuck along the way or may not have much time to invest in the application process. We know many people who start their application fail to complete it. We also know that of those who do complete their applications, a further portion choose to withdraw or fail to send us the required documentation. It’s clear to us that more can be done, so we’re investing in our tele-services team to make phone-based support more readily available and easier to book. 

Providing confidence via transparency and understanding

Choosing life insurance isn’t always as straightforward as purchasing other insurance products, such as insurance to protect your car, although the underlying concept is similar. During the application process members won’t know all the answers, but if we can demonstrate fairness and understanding throughout, it can go a long way to ensure they have confidence in their cover, in their superannuation fund or in TAL.

There will be times when we decline a member’s application, and whilst it might be possible in some cases to STP decline decisions, we believe that having underwriters review all decline decisions and empowering them to call members directly to discuss and explain those decisions, creates a far more positive experience than the potential STP gain. It’s important in all situations, but especially with declines, that we’re transparent in how we communicate the outcomes of our decisions. Being proactive with information is critical as it can help with increasing understanding of why certain decisions are made. We want to avoid situations where members are confused or feel they lack control when there’s an adverse outcome. 

To complement the internal checks and controls TAL has in place, we’ve recently launched WunderWriter, a tool that leverages AI and machine learning to improve confidence in the underwriting process. Through this innovation we can audit underwriting cases in order to identify inconsistencies in cases that can then be escalated for further review. For members and partners, having this additional layer of scrutiny helps provide confidence in decisions we make, and allows out teams to focus on complex cases where human experience and judgement is needed.

Empowering members through greater engagement and choice

The life insurance industry has always played a critical role in supporting Australians in times of need. We understand the value and assurance it can provide members, which is why we’re focussing on underwriting, harnessing the benefits of going digital, and utilising AI and data to enhance this overlooked but critical touch point. 

We’ve taken the deliberate step of structuring the underwriting teams within our Member Engagement function, in order to embed a culture that prioritises member engagement and experience. With this mindset, we are looking beyond the usual focus on application speed, and examining how we can provide a simpler experience and greater confidence in outcomes, which can contribute to improving members’ overall experience with their cover. If we can continue to instil this assurance and demonstrate our value, there can be positive results for members and superannuation funds alike.

For further information on TAL's approach to underwriting, please speak to your Client Manager.