Automation in Insurance Underwriting: Streamlining Processes for Businesses and Customers

In the past, companies have often avoided large-scale technology adoption in the underwriting department, preferring to rely on the acumen and accuracy of their underwriting teams. Growing competition, rising customer expectations, and the Insurtech boom, however, changed these dynamics. The role of underwriters has evolved from a traditional risk assessor to a strategic business enabler.

Today's underwriters are crucial business partners and strategic thinkers who require data-based intelligence to support and shape critical business decisions. As a result, automation in insurance underwriting has become crucial. It streamlines processes, empowering underwriters to focus on more complex and value-adding tasks.

Challenges Associated with Manual Underwriting

Traditional underwriting processes are marred with various challenges. Typically, underwriters rely on manual processes across various, disparate legacy systems. Manual data entry and disconnected systems lead to high chances of error, slow quote turnaround times, and omissions. The data intake is often inconsistent. As a result, underwriters are left with a mess that inhibits visibility, consistency, and speed.

On the customer side, the manual underwriting process could be equally frustrating. Long waiting periods for policy approvals often left customers feeling anxious and unsure, sometimes leading them to seek coverage elsewhere.

Benefits of Underwriting Process Automation

Introducing automation in insurance underwriting offers several benefits, such as:

Time and Cost Savings

By automating routine tasks, insurers reduce the time and resources needed to process each application. This means lower operational costs. Automated systems work around the clock without needing breaks, which means policies are processed faster and in higher volumes.

Business Growth

Insurance process automation helps businesses grow. As an insurance company expands, the number of underwriting tasks increases. Without automation, this would require more staff, driving up costs. But with automation, the system is able to handle more work without slowing down, allowing the business to scale efficiently.

Quick Policy Issuance

Customers benefit from automated underwriting too. One of the biggest frustrations for policyholders is the wait for approval. Insurance policy automation slashes this wait time, meaning policies are issued much faster.

More Transparency

Automation also brings more transparency. Customers get real-time updates on their application status, see what’s being considered in their risk assessment, and even get instant quotes. This builds trust and improves the overall customer experience.

Uniform Support and Resolutions

Speaking of objectivity, underwriting process automation solutions introduce standardization in how the business handles its customers. Whether it is the brand voice or the tonality or the kind of resolution offered, everything stays the same irrespective of disparate agents and teams or employee churn.

Supercharging Automation with New-Age Technologies

Hyper-automation, a level up from automation, enables the insurance office to carry out its regular tasks with minimal human intervention. End-to-end automation also ensures accuracy, speed and data transparency, supporting the underwriting office to justify its role in the middle of business strategy.

Here's a simple example.

It's possible that your underwriting team has already automated policy issuance, quote generation, invoices, etc. However, each of these functions is likely to generate vast amounts of data and legacy software isn't equipped to draw useful insights from this data. Hyper-automation using Artificial Intelligence, Machine Learning, and RPA help the underwriters make better use of this data.

Machine Learning algorithms may also be trained for accurate forecasting and planning to deliver information with minimal manual work or intervention.

Adding The Human Touch: Balancing Automation with Personal Service

While automation offers many advantages, it’s important to remember that underwriting isn’t just about data. It’s also about understanding each customer’s unique needs. Some cases will always require human judgment, especially complex ones or those needing personalized advice.

The key is to balance automation with human touch. Automation should handle routine tasks, freeing up underwriters to focus on complex issues and providing personalized service. This way, the process remains efficient, but customers still get the individual attention they deserve.

The Role of Underwriters in the Automated Era

In the automated era, underwriters need to ensure that insurance remains a human-centric experience. Here’s how:

Complex Case Analysis: Handling complex cases that require in-depth analysis and judgment.

Customer Relationship Management: Building strong relationships with customers and providing personalized advice.

Regulatory Compliance: Ensuring that underwriting processes comply with relevant regulations and industry standards.

Innovation: Identifying opportunities to use automation to improve efficiency and customer satisfaction.

Conclusion

Automation eliminates any bottlenecks in underwriting operations to boost efficiency. Many underwriting teams spend a lot of time evaluating risks—which requires reviewing and reconciling information to ensure no errors have crept into the data due to disparate processes.

Automation in insurance underwriting not only makes these processes automatic, but it also connects them to ensure zero discrepancies in data.

Read also - Maximizing RoI of Insurance Automation Initiatives