How Technology Has Improved The Life Settlements Industry
When systems are operating at their peak efficiency in conjunction with talented, dedicated people, the big winners are the consumers. The life settlement industry is demonstrating this principle perfectly as it moves into a season of new technological innovation to streamline the settlement process.
Two cutting-edge developments in particular, robotic process automation (RPA) and artificial intelligence, have been incorporated into the world of life settlements to the benefit of buyers and sellers alike. Following are the particulars of both RPA and AI—their history, their advantages and their potential impact on the settlement industry:
RPA is a route to greater efficiency
In RPA, software robots are used to boost the efficiency of business automation technology through a user-friendly process that doesn’t require coding from a software engineer. Any user can configure an RPA bot to execute keystroke-level processes, leading to more efficient processing of information. Within an insurance framework, the time saved by RPA can lead to more rapid processing of applications and claims, simpler policy sales or cancellations and standardized processes across every department of a company.
According to data in the 2018 World Insurance Report, word about the benefits of RPA has gotten out among life insurance providers. The report states that more than 45 percent of life insurance companies have already incorporated RPA into some aspect of their processes, and another 35 percent indicate that they are in the pilot phases of RPA utilization. In the next decade, it seems that an insurance company without RPA will be in the small minority.
AI can be a game changer
Once solely the domain of science fiction, artificial intelligence (AI) is the term used to describe computer hardware that can process data and essentially think for itself, enabling quicker and more efficient completion of once-daunting computing tasks. It’s a technology with myriad applications, and the insurance industry is one sector that has embraced the idea of using AI to help human experts cut costs and serve consumers better.
The wide-ranging implications for insurance providers include faster, more personalized claims settlement using data provided through AI, better customer service through the buying experience due to AI personalization and even specialized pricing for insurance based on data gleaned through Internet of Things (IoT) sensors, which are capable of tracking consumer movements to allow them to receive a customized insurance quote.
When RPA and AI meet life settlements
Just like the insurance industry, the life settlement sector is becoming increasingly aware of the benefits of a process integrated with RPA and AI technologies. As author John McFarland stated in a November 2018 ThinkAdvisor article, RPA and AI are already in the life settlement pipeline and poised to create more demand for settlements from the seniors who could most benefit from a life insurance sale.
McFarland specifies three potential advantages of incorporating RPA into AI into the life settlement process. First, customized filtering powered by AI can pinpoint seniors who are the most likely to qualify for settlements, reducing the burden on settlement providers’ salespeople and decreasing the number of people who pursue a settlement needlessly. As McFarland writes, “The result will be overall industry growth by creating more successful and stress-free experiences for both the buyer and seller.”
The second boost new technologies can give to the settlement industry comes through the pricing structure for settlements, which can become more accurate and efficient with the involvement of AI and RPA innovations. In the new model, policy information and medical underwriting data can be more quickly and efficiently processed that can lead to more accurate quotes and faster payments.
Finally, fund managers who have purchased policies in life settlements can utilize RPA and AI to optimize the management of their portfolios. With better accuracy and more efficient monitoring, investors and advisors alike will be able to ensure profitable results and, ultimately, grow the settlement business as more and more investors see the advantages of participation.
Letting technology be our partner
Like other top settlement providers, Magna is committed to understanding and integrating any new technology that can spark better results for our clients. We are already using RPA and AI in some processes, and in future years the continued incorporation of these measures is a certainty. To learn more about Magna and the ease with which you can inquire about a life settlement, visit our Magna life calculator today.
*Comments provided in this post are for informational purposes only and should not be construed as financial, legal or tax advice, recommendations or solicitations. Please consult your financial, legal or tax professional with questions related to the information presented, or for advice as to whether a life settlement is right for you.