# Destination AI Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-04-25 Category: INSURANCE Category URL: https://financedigest.com/category/insurance Meta Title: Augmented Automated Underwriting: Evolution of Life Meta Description: Discover how AI is revolutionising the insurance industry with augmented automated underwriting, unlocking cost efficiencies and streamlining processes for URL: https://financedigest.com/destination-aihtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-1334574095-1736815842255-compressed.jpg) _By_ **_Declan O’Neill,_** _EVP Product & Data at Munich Re Automation Solutions_ Augmented automated underwriting and the evolution of the life insurance market It’s almost inevitable. [Spend your working life identifying](https://www.financedigest.com/paid-search-advertising-how-to-identify-wasted-spending.html "Paid search advertising: how to identify wasted spending"), analysing, quantifying and ascribing monetary value to risk, and you’re likely to have a fairly strong aversion to it. Or more accurately, an aversion to undertaking new endeavours with inadequately understood consequences. The [insurance industry](https://www.financedigest.com/how-can-the-insurance-industry-avoid-having-a-kodak-moment.html "How can the insurance industry avoid having a ‘Kodak Moment?’") is, on any number of levels, the very definition of risk-averse. And yet, for all the commentary suggesting otherwise, [insurance still has an appetite for innovation](https://www.financedigest.com/synechron-wins-global-acord-insurance-innovation-award-for-second-consecutive-ai-powered-insurtech-accelerator-recognized-for-innovation-in-risk-visualization.html "Synechron wins Global ACORD Insurance Innovation Award for Second Consecutive AI-Powered InsurTech Accelerator Recognized for Innovation in Risk Visualization"). If the insurtech sector is any indication, then an interest in and requirement for new [solutions is being recognised and slowly addressed](https://www.financedigest.com/western-digital-transforms-the-mobile-experience-with-new-high-performance-solutions-designed-to-address-todays-and-tomorrows-consumer-demand-for-high-quality-content.html "Western Digital Transforms the Mobile Experience with New High-Performance Solutions Designed to Address Today’s and Tomorrow’s Consumer Demand for High-Quality Content"). It may not employ the language of disruption that runs through the wider [fintech market](https://www.financedigest.com/2021-and-the-fintech-market-bonanza.html "2021 and the fintech market bonanza"), it may be short a few unicorns and unable to boast some of the record-breaking funding rounds, but a quiet tech evolution has been building in insurance nonetheless. Hence the advent of automated underwriting facilitated by more advanced algorithms and [data analysis](https://www.financedigest.com/durham-county-council-reduces-data-log-analysis-costs-by-50-with-real-time-analysis-and-security-tool.html "Durham County Council reduces data log analysis costs by 50% with real-time analysis and security tool"). Where insurtech does overlap with its more vocal fintech counterparts is in the greater use of [artificial intelligence](https://www.financedigest.com/how-artificial-intelligence-is-simplifying-sanctions-screening-for-insurers.html "How Artificial Intelligence is Simplifying Sanctions Screening for Insurers") (AI) and machine learning to solve age-old problems around data analysis and interpretation. It’s about five [years or so since](https://www.financedigest.com/japans-emperor-gives-first-public-new-years-greeting-since-2020.html "Japan’s emperor gives first public New Year’s greeting since 2020") AI first became a topic of conversation in insurance. Since then, despite the intensity of the debate, it has often felt like a reality that is always just over the horizon – a destination that kept [moving even as more and more efforts were directed towards](https://www.financedigest.com/investment-advice-moving-towards-a-new-model.html "Investment advice – moving towards a new model") it. But [recent research](https://www.financedigest.com/recent-research-in-vitro-toxicology-testing-market-to-witness-steady-growth-at-5-6-cagr-by-2017-to-2022.html "Recent Research: In Vitro Toxicology Testing Market To Witness Steady Growth At 5.6% CAGR By 2017 to 2022") suggests that the journeys made so far have not been in vain. We are at a point where embracement of AI is about to step up a gear. The global value of insurance premiums underwritten by AI have reached an estimated $1.3 billion this year, as stated by [Juniper Research](https://www.juniperresearch.com/researchstore/fintech-payments/insurtech); but they are expected to top $20 billion in the next five years. As a destination, it is closer and more attainable than ever before. However, AI is not an island. Its promise of $2.3 billion in [global cost](https://www.financedigest.com/september-tropical-cyclones-cost-global-economy-more-than-4bn-according-to-aon-catastrophe-report.html "September tropical cyclones cost global economy more than bn, according to Aon catastrophe report") savings to be achieved through greater efficiencies and automation of resource-intensive tasks will not be achieved in isolation. AI remains part of a more [complex ecosystem of data](https://www.financedigest.com/tackling-the-complexity-of-data-within-financial-organisations.html "Tackling the complexity of data within financial organisations") gathering and analysis. It can apply new [technologies to get the best out of the already established and still-emerging data sources that feature in underwriting offices around the world](https://www.financedigest.com/is-wearable-technology-ushering-in-a-brave-new-healthy-world.html "Is wearable technology ushering in a brave new healthy world?"). It emphatically does not require these existing investments to be ripped out, replaced or downgraded. It is more helpful therefore to see AI as the differentiating [factor in the latest](https://www.financedigest.com/car-bulb-market-demand-supply-growth-factors-latest-rising-trend-and-forecast-to-2028.html "Car Bulb Market Demand, Supply, Growth Factors, Latest Rising Trend and Forecast to 2028") generation of insurance IT: augmented automated underwriting, or AAU for short. AAU gives underwriters the ability to spot patterns and connections that are, frankly, either invisible to the human eye or which take normal, human-assisted [processes unfeasible amounts of time](https://www.financedigest.com/tightening-up-time-consuming-processes-in-the-financial-industry.html "Tightening up time consuming processes in the financial industry") and resource to identify. Whereas earlier generations of automation were able to pick up the low-hanging fruit of insurance markets – the individuals whose [driving history fit into clearly delineated boxes](https://www.financedigest.com/red-box-appoints-new-ceo-to-drive-growth.html "Red Box Appoints New CEO to Drive Growth"), for example – AAU can take into account all of the rich complexity of the human experience. It can spot the nuances and individualities that populate the [life market](https://www.financedigest.com/n95-masks-market-rapid-expansion-of-the-life-science-industry-is-anticipated-to-drive-the-global-market.html "N95 Masks Market: Rapid Expansion of the Life Science Industry is Anticipated to Drive the Global Market"), for example, and translate those into accurate policies. That’s good news for both underwriters and their customers. AAU can significantly reduce the need for separate medicals, repeated questions, lengthy decision-making processes, and drastically increase the speed at which a potential [insurer can get a quote and cover](https://www.financedigest.com/japan-insurers-to-maintain-cover-for-lng-vessels-in-russian-waters.html "Japan insurers to maintain cover for LNG vessels in Russian waters") – while continually improving the way risk is calculated and managed. It can make sure the [decision-making process](https://www.financedigest.com/gary-mcgaghey-explains-how-cfos-can-strengthen-decision-making-processes-and-reimagine-the-finance-model.html "Gary McGaghey Explains How CFOs Can Strengthen Decision-Making Processes and Reimagine the Finance Model") remains in the hands of underwriters rather than IT departments, enabling them to set and update the rules and parameters as befits their preferred business model. It consequently makes advanced, complex and precise decision-making available to a broader range of underwriting businesses – which is good for those businesses, good for [customers and ultimately good for the entire industry](https://www.financedigest.com/listen-care-share-ofwats-latest-report-on-the-water-industrys-handling-of-customers-during-the-pandemic.html "Listen, Care, Share: Ofwat’s latest report on the water industry’s handling of customers during the pandemic"). AAU – augmented automated underwriting – is an example of the realisation of AI’s promise. As such, it’s set to become one of the key [talking points and disruptive technologies of the insurance](https://www.financedigest.com/japan-insurers-in-talks-with-reinsurers-to-resume-coverage-in-russian-waters.html "Japan insurers in talks with reinsurers to resume coverage in Russian waters") industry. And this time, AAU is both a journey and destination that all progressive [insurance organisations need to be considering for their future](https://www.financedigest.com/insuring-themselves-for-the-future.html "Insuring themselves for the future") operations. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---