Celent has released a new report titled Resetting the Bar: Key Metrics in Life Insurance New Business and Underwriting 2016. The report was written by Tom Scales and Karen Monks, analysts in Celent’s Insurance practice.

For insurers, the new business and underwriting process is a key to their success.

Insurers vary in their key metrics, but all have improved since 2007. High face value writers process fewer applications at a higher cost than moderate face value writers. All insurers have seen a drop in policy values; however, volume of policies issued is equal with 2007. This means costs per policy must continue to decrease for insurers to remain profitable.

High face value writers experienced a smaller improvement than moderate face value writers. With larger operating margins, high face value writers have more leeway than moderate face value writers in terms of urgency of improvements. Moderate face value writers have a lower cost base and no choice but to pursue automation.

Changing policyholder expectations in terms of digital may negate the benefit of size. Automation speeds up cycle time, improves accuracy, and reduces costs. Depending on the automation it can divert people to higher-value work (like underwriters only being used for complex, high face value policies) or reduce staffing levels depending on the strategy being pursued.

“We are seeing improvements in carriers between the two reports,” said Monks. “Companies have made investments in their people and technology, and it shows.”

“As a former operations leader, I am encouraged by the progress,” said Scales. “But we believe there is still room to improve.”