Automated underwriting : its role within the Maltese life insurance industry

Abstract

Several life insurers are recurring to technology as a solution to speed up the underwriting process whilst reducing costs. Automated underwriting systems are able to do so whilst improving the quality, consistency and transparency of underwriting decisions. This study deals with several characteristics including current and future interest in AUS, benefits and challenges underwriting units face when implementing such engines, as well as customers' expectations and acceptance of automation in underwriting. In addition to several detailed findings, the research brought to light a number of key points. The research design used gathered both quantitative and qualitative data by means of a questionnaire and interviews. First, a direct relationship between speed to issue and proposers seeking alternative insurers was noted. Second, lower income groups are willing to wait less than those earning a substantial high income for an underwriting decision to be notified. In turn, high income groups rate transparency of the process more significantly. Finally, despite the challenges involved, out of four local insurance companies, one currently makes use of automated underwriting systems, whilst another is considering implementation. The other two insurers opted not to participate in the study. The study produced a considerable amount of important results and data. Focus was given to areas identified as most significant in relation to the research question. Research suggests that the Maltese population would welcome the use of automation as a tool offering life products online. The analysis concludes by recommending further research that may be undertaken, whose results could encourage the use of automation further.