Insurance buyers expect an affordable and tailor-made policy from their carriers. However, most incumbents are falling behind, stuck in lengthy and costly processes. Many insurance providers are losing market share because they still rely on obsolete technology.
The Insurance Underwriting Process
Insurance underwriters gather a candidate’s personal information and decide how much coverage to provide. The decision is based on data, stats, and regulations. These are some of the most common factors that are taken into consideration:
- Profession
- Income
- Medical history
- Lifestyle
The difficulty plaguing the industry is that underwriters are often inundated by the number of applications that need to be approved. For that reason, insurers are incapable of responding quickly, which frustrates potential policyholders who go to competitors for their insurance.
This is why insurance companies must find a way of optimizing their underwriting procedures while remaining compliant with evolving regulations.
Therefore, the future for insurers who want to be competitive is to use automated underwriting solutions to bring optimize to their underwriting.
Understanding Automated Insurance Underwriting
Automated underwriting uses powerful software solutions instead of humans to underwrite applications. This means that risk assessments are done accurately and in a fraction of the time it would take a human underwriter.
Therefore, automation solutions optimize the underwriting process, which results in consistent decisions and faster time to market.
Automated vs Manual Insurance Underwriting
While automated underwriting software solutions effectively perform risk assessments, manual underwriting is the polar opposite: manual insurance underwriting is a lengthy process because it’s done by a human.
The human underwriter has to analyze countless documents in order to issue an accurate rate to the potential policyholder.
The entire underwriting process, which includes data processing, may take weeks to complete. Therefore, the manual approach to underwriting is not only time-consuming but could result in potentially costly risk assessments due to human error.
Meaningful Benefits of Automated Underwriting
While automated underwriting solutions perform the same process as human underwriters,, there are several important benefits to implementing automated insurance underwriting.
Automation optimizes the first stage of the underwriting process by assessing an application and flagging elements that require the attention of a human underwriter.
Since a human underwriter plays a small role in the automated underwriting process, the likelihood of potentially expensive mistakes is eliminated.
Once the automation software is given all the necessary information, then it generates an accurate risk assessment in mere minutes! Insurance carriers don’t have to worry about missing relevant data or transposition errors.
Optimizing Underwriting with Automation
Properly configured automated insurance underwriting software complete risk assessments in an instant. In simple cases, the automated solution can make a decision on its own without the need for human approval.
Therefore, insurance companies can drastically boost their customer experience by providing instant coverage with lower rates.
Underwriting with Rules-Based Automation
Business rules engines automate complicated and lengthy tasks, freeing up underwriters to focus on cases that require their experience and professional expertise.
Carriers looking for the best insurance technology tools cannot overlook rules engines. These software solutions are designed to improve productivity and boost the customer experience. Rules engines are designed to be user-friendly so that non-technical underwriters can make changes to the criteria on the fly without relying on the IT department. Therefore, the underwriting process is placed squarely in the hands of underwriting managers.
