The Accelerated Underwriting Path: 5 Ways Insurance Leaders Can Speed Process
Speeding up the underwriting workflow is a top goal for insurers. Get advice on how to make the most of accelerated underwriting process tools that reduce time to quote.
Underwriting is a critical component of the insurance lifecycle; It helps insurers assess what risk class an applicant falls into and determine the appropriate coverage amounts and pricing of insurance policies. As insurers face an increasing number of economic disruptions, natural disasters, and challenges from digital-native insurance companies, the pressure is on to create an accelerated path for the underwriting process.
Thanks to advances in technology, the automation movement has picked up momentum, with many insurers now using tools to create automated underwriting programs. This simplified underwriting process helps companies process insurance applications faster and speed timelines for approval so they can help more qualified applicants, quickly and efficiently. That’s critical, as speed to quote represents a key competitive advantage and makes for a more pleasant customer experience.
How do the fastest companies in the insurance industry create a streamlined process for their underwriting program and reduce time to quote? Let’s examine the key features in a successful playbook.
Accelerated underwriting process vs traditional underwriting process
Why is underwriting efficiency moving to the top of the modern insurer's priority list? Consider the differences between automated and traditional underwriting in commercial insurance.
Traditional underwriting advantages:
Human underwriters provide personal interaction with clients.
Allows for detailed and nuanced risk assessments in more complex business lines or highly specialized industries.
Gives greater transparency into how application decisions are being made.
Traditional underwriting disadvantages:
The application process and other underwriting tasks are manual and include data entry from standard and non-standard forms, and manually calculating risk level and pricing.
Limited access to customer information means tracking down data in disparate systems and contacting customers for information or additional phone interviews.
Time-consuming and resource-intensive.
Prone to human error and bias.
Limited by the availability of underwriters and their expertise.
Automated underwriting tools se advanced technologies, such as artificial intelligence (AI), intelligent document processing (IDP), and machine learning, to automate some of the manual processes involved in traditional underwriting. The magic of automated underwriting tools is that they can quickly analyze vast amounts of data and make a decision within minutes , leading to shorter timelines for approval so staff can help additional customers.
Automated underwriting advantages:
More efficient than traditional underwriting with a faster approval process.
Reduced risk of human error and improved data quality (e.g., rekeying in data).
Improved risk class assessment and pricing.
Ability to handle large volumes of data and quickly make application decisions in real-time.
Better customer experiences due to faster time-to-quote.
Allows underwriters to focus on more high-value tasks.
Automated underwriting disadvantages:
Potential for reduced personal interaction with clients.
May require a significant upfront investment in technology and training.
Human intervention may still be required in complex lines or highly specialized industries.
Automation may not fit every workflow, but with the rapid evolution of risk, insurers are focused on automating critical parts of the underwriting process. It’s true that automating specific tasks can help insurers streamline operations, boost efficiency, and improve customer satisfaction, but ultimately the decision to automate will hinge on several factors, including the type of insurance involved, the complexity of the application, and customer expectations.
Underwriting process flow: 5 ways to reduce time to quote.
To compete and win in the modern insurance arena, insurers need to adopt a business-focused playbook that integrates and coordinates multiple technologies, streamlines complex processes, cuts costs, and meets customer expectations when it comes to:
Application review: Reviewing the client's application and identifying any potential risks.
Data gathering: Collecting and verifying information about the client, including financial records, claims history, and additional underwriting evidence .
Risk assessment: Assessing the risk classes associated with the client, including the likelihood of a claim being made and the potential cost of that claim.
Pricing: Calculating the cost of the insurance policy, taking into account the assessed risk and any discounts or additional charges.
It goes beyond simply comparing one tool to another to find the right blend of technologies that work together to minimize risk, reduce costs, and deliver insurance products that stand out. What do successful strategies have in common? Here are five areas to focus on as your organization works to improve process flow and speed time to quote:
1. Data ingestion: Real-time processing and automatic extraction of structured and unstructured data from multiple sources in a single data fabric.
2. Clearance: Faster data duplication and coverage checks; speedier application processing; record tracking; and coverage checks.
3. Triage: Customized queues for new and existing customers, expedited exception handling, automated customer emails, follow-ups, and more.
4. Data enrichment: Open integrations and APIs with existing claims and policy admin systems, easy integration with third-party data sources and insurance partners, and quick quote and bind capabilities.
5. Collaboration: Better cross-functional collaboration between underwriters, actuaries, and other stakeholders for a seamless underwriting process.
Clients expect quick quotes and seamless digital experiences, and by automating core elements of the underwriting process, integrating data, and simplifying procedures, insurers can speed up the quote process and enhance the overall underwriting experience.
