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The underwriting choice

The underwriting choice

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By Peter Tilocca ·
December 06 2018

The underwriting choice

Recently ANZ OnePath launched its new risk engine, providing an alternative model to the current trend of buying an off-the-shelf underwriting solution. I explain the thinking behind this decision.

Underwriting is currently enjoying its time in the sun and getting the attention it deserves.

For more than a decade, it could be argued that underwriting has been the elephant in the room for the insurance industry, in desperate need of simplification and improvement, but relegated to the 'too hard basket' because of the data intensive nature of it.

Yet for advisers, underwriting speed and quality is a driver of satisfaction with an insurer - the 2018 Investment Trends Planner Risk report rated "a good underwriting process' as the top reason advisers favour their main insurer.

At ANZ OnePath our focus has been to continue to ask the right questions - our 52.9 per cent acceptance rate for clients under age-50 on all lump sum benefits is testament to this - but the need to continue innovation and to push through any barriers has always been high on our list.

With advancements in technology and the emergence of new tools that help analyse huge data sets, the stage had been set for true innovation in the underwriting process.

Excel spreadsheets of data can now be converted to heat maps and data points so they could be analysed visually, creating huge breakthroughs in the way health data can be reviewed.


This appetite for change, the rise of the consumer, the emergence of new technologies has been the perfect storm behind the flurry in activity we have seen in the underwriting space over the past 18 months.

It has also required Australian insurers to make some big decisions about the direction they will take.

The choices it seemed were an off-the-shelf solution that could slot into an existing insurance process, or to develop a custom built insurance process.

For ANZ OnePath the choice wasn't quite as stark as either of the above options, as its path to innovate started a few years earlier. In 2016, OnePath partnered with the Advanced Analytics Institute at the University of Technology Sydney.

At the time, OnePath did not limit or cap the innovation being sought, rather setting a much loftier goal to make insurance better for the consumer.

To do this, it had to bring underwriting to the fore.

By nature, underwriting is a relatively behind-the-scenes function in the insurance process, but its impact on the whole process is huge.

When a customer fills in their personal statement, which details their health history and needs, this will shape what cover they will receive and how quickly the policy can be underwritten.

While we wanted to continue to ask the relevant questions in the personal statement, we wanted to ask them a better and more understandable way.

We wanted to focus on the experience of underwriting, and the experience of insurance. We zeroed in on the following:

- How do advisers and clients supply their medical information?

- What is their experience in supplying this medical information?

- What are we asking customers to know about their personal health?

- Are we asking these questions in a way that could be understood?

What emerged from this phase of the project was the opportunity to make some significant inroads into the capability of underwriting.

Using new tools such as data analytics and predictive underwriting, we could make the underwriting process more intuitive and flexible and help consumers provide the information required.

The road to innovation became possible, and in doing so, the decision could be made to really take on underwriting, and make it the consumer experience that it could be.

It also gave rise to an opportunity. While most Australian insurers have chosen the off-the-shelf underwriting solution, OnePath could now shape an underwriting solution that was intimately integrated with its whole insurance process and could continue to shape its future.

We believed that differentiation in underwriting technology provided OnePath with a competitive advantage; something which advisers both value and understand makes a real difference to their customer's experience of insurance.

Along with choice in product and pricing, advisers could now use a different underwriting risk assessment approach.

For OnePath, we now had the flexibility of our own roadmap of innovation, our own development cycle, and to develop our own initiatives. This means OnePath can be more flexible in listening to advisers requests, and partner with them on delivery priorities.

It is clear underwriting will continue to be a source of innovation and disruption in the insurance process, given its data intensive nature and the emergence of new tools which can streamline and analyse this data.

Its central position in insurance process also means its role in the customer experience of insurance is cemented. It is up to Australian insurers how much value they attach to this function to drive change.

Thankfully in all this, underwriting has taken its rightful place - centre stage.

Peter Tilocca is chief underwriter at ANZ

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