The volume of electronic life insurance applications submitted in 2010 exceeded those of traditional paper-based applications.
This was one of the key findings revealed in reinsurance firm Munich Re‘s first industry-wide Electronic Underwriting Survey.
While the volume of electronic proposals outstripped paper submissions by 11%, more total premiums were still underwritten in hard copy applications during 2010 (by 7%), where many of the higher sum insured cases were still submitted the traditional way.
The Munich Re survey reported the highest volumes submitted electronically in 2010 were in relation to term life insurance products, while the overall average premium size for all insurance products was slightly higher in paper-based applications.
Other key findings from the survey, which also highlighted the impact of tele-underwriting services within the underwriting process, included:
- The average time taken to underwrite an electronic application in 2010 was 21 days, which was 20% faster than the average time taken for underwriting paper applications
Straight through processing rates… averaged 24% of all submissions
- Straight through processing rates (ie where the electronic underwriting decision is made without referral to an underwriter) averaged 24% of all submissions across all products. However, Munich Re noted this average varied significantly between individual insurers.
- 60% of companies offer signature-free processes or are flexible on the requirement for client signatures
- Tele-underwriting services are now offered by the majority of insurers who participated in the survey, with this capability expected to be offered by all participating insurers within the next 12 months
- The volume of personal medical attendants’ reports requested has reduced since the introduction of tele-underwriting
- Following tele-underwriting, 56% of applications require no further assessment in order for terms to be offered
Munich Re notes that the significant advancements made within the Australian life insurance industry over the last few years in electronic underwriting has seen the Australian market now considered as one of the global leaders in this space.
