Clunky underwriting processes may be a thing of the past as new technology is applied. Paul Robertson speaks to Martin Werth about his UnderwriteMe system.
The means by which advisers submit new protection business has remained much the same for years, and most advisers would agree that it is cumbersome, inefficient and not particularly modern.
UnderwriteMe, which has the sound backing of 51% from Pacific Life Re, is one of a slew of new methods of underwriting soon to be competing for the adviser market's attention.
To put it simply, the new system asks a series of questions tailored to be the minimum to generate ‘buy now' prices with no further underwriting, from all participating providers, through a direct link to those provider's underwriting engines.
If the system is unable to offer a ‘buy it now' price, perhaps due to disclosures or sum assured, it will indicate the likely rating and detail the evidence required (eg, GPR).Essentially, the adviser will have a single process for applying for all protection contracts.
Martin Werth, CEO of UnderwriteMe and former managing director of Ageas Protect, is adamant that the current system cannot remain: "Modern technology transforms the sales process from a clunky one that is dependent on each individual insurer, to a seamless one that is efficient, streamlined, and that is what we have come to expect in our lives," he said.
"We are trying to move away from price, which dominates. For me, is about improving the quality of covers and improving the segmentation of the customers you are targeting."
Connectivity
Interestingly, the software makes it just as easy to search the whole of the market, because it is to search a restricted panel, so software could open up the market for all insurers. However, as Werth points out, panels will still have a place: "There are even greater benefits for a restricted panel, because you might be able to have both better terms and a shorter application process.
"But, with this technology, it does not matter whether it is connecting to one insurer or ten insurers: it is just about connectivity, and through one process, each insurer gets the data it needs to give a price and whether it is a ‘buy now' decision."
So what is in it for the providers? They are basically undergoing an all-market beauty parade every time details are typed in. What do they gain from this?
"At the moment, they are all competing on a quick quote, they have got no other differentiators besides the price of the quick quote, but it is the wrong price; it is not the transparent price," Werth said.
"Once you move to a process like this, you can target the rated customers, for example. You can start emphasising cover differences more, because there is more time to spend on the cover differences because the red tape of the process has been simplified.
"So, you can differentiate by type of risk, by cover features, by segment of the market you want to go for. I think it is a much richer way to compete than you currently have at the moment."
UnderwriteMe has, to date, signed up seven insurers keen to move forward, enough for Werth to call a quorum. But, to date, the start-up has seen a range of provider attitudes.
"Some see huge growth opportunity and want to be part of that. Others are saying, ‘We will be quick followers: if it works, we will go with it.' And there are some saying, ‘Well, we kind of like how the market is, but we have enough who are looking to try to change to make the change happen.'"
Interestingly, there is a good chance that this technology, and others that may follow, will open the market to those smaller insurers that previously would not be considered by most advisers.
