How Automated Insurance Management Software Improves Underwriting

Let’s face it, the insurance industry isn’t exactly known for its lightning-fast pace driven by digital-first solutions. But in today’s competitive landscape, where deals hinge on quick decisions, a sluggish underwriting process can feel like a millstone around your neck. Imagine the frustration of potential customers stuck in application purgatory, while lost opportunities pile up for your company.

The culprit behind this slow dance? Often, it’s a reliance on outdated, paper-laden workflows. Thankfully, a revolution is brewing, and it involves a little something called automated insurance management software.

This blog dives deep into how this innovative technology can transform your underwriting process. Let’s explore how it can reduce turnaround times, boost accuracy to superhuman levels, and free up your underwriters to tackle more strategic tasks.

Consequences of Inefficient Insurance Underwriting

• Wasted Resource Bandwidth: Survey reveals that underwriters spend 40 percent of their time on non-core activities such as data entry and manual document verification, and only 30 percent of their time is spent on actual underwriting. This represents an efficiency loss of USD 85-USD 160 billion over the next few years.
• Inefficient Workflows: Inefficient systems and manual workflows are some of the prominent challenges faced by underwriters. Furthermore, it is estimated that around 80 percent of data received by underwriters is unstructured and housed in disparate formats such as emails, PDFs, forms, etc. As such, obtaining relevant details from unstructured data formats can be tricky. It heavily impacts underwriting efficiency and increases the processing time.
• Higher Scope for Error: Manual data entry and document verification are prone to human errors. This often leads to inaccurate risk assessments and potential disputes down the line.

Benefits of Using Insurance Management Software for Automating Underwriting

Technology is playing a pivotal role in closing the gaps present in traditional business models and processes. The same can be seen in the insurance industry. The proliferation of Artificial Intelligence, Machine Language, and Software-as-a-Service (SaaS) in the industry is also providing innovative solutions to age-old pain points like efficiency, accuracy, etc. Here is how new-age technology-based modern insurance management software can automate underwriting to help insurers:

Omnichannel Distribution

With the advancement of technology, policyholders of today have become increasingly more connected, informed, and channel agnostic. To keep up with the expectations of modern prospects and policyholders, insurers must embrace an omnichannel strategy. With omnichannel distribution, insurers can create a distribution network that locates the right clients and propels them to the right channel.

As such, by investing in an insurance software system for underwriting, insurers can improve their reach and accessibility. They can tap into various channels to reach out to prospects and connect with them through multiple touchpoints like web brokers, D2C websites and mobile apps, and independent agents. It ensures a seamless application process, irrespective of how or where the customer has initiated contact.

Higher Accuracy

Typically, the insurance underwriting process involves multiple stakeholders, regulations, guidelines, and paperwork. This leaves significant room for inaccuracies and errors, such as policy misclassification and inaccurate risk assessments, to creep in. Also, it is not uncommon for loan officers to make mistakes while assessing risk and compliance, thereby sending inaccurate recommendations to the underwriting teams.

However, with automated insurance company software, insurers can take a more streamlined and systematic approach to decision-making. AI and ML algorithms can be used for assessing risks using volumes of data in no time, thereby improving efficiency and accuracy. Automation also helps detect errors, bugs, and gaps within the processes. For instance, automated insurance management systems for underwriting can assess W2 forms, bank statements, insurance policies, personal identification, etc in record time and boost underwriting efficiency. The data-driven decisions facilitated by automated underwriting systems also help reduce human bias and discrimination.

Higher Customer Conversions

The typical process of applying for insurance coverage is marred by several roadblocks. Therefore, insurance businesses of today face considerable drop-off somewhere between when a prospect first showcases interest and finally makes the purchase. Since the underwriting process can be tedious, requiring seemingly endless form-filling and furnishing of information, prospects may end up losing interest.  Apart from being expensive and time-consuming for insurance providers, these processes can be annoying for customers, especially in the digital age where they can buy products and services online almost instantly.

Automated underwriting modules within insurance management software enable customers to buy insurance policies in no time. These systems reduce the number of questions asked and documents required, thereby increasing claims conversions.

Conclusion

To summarize, underwriting automation can benefit insurance businesses of all sizes. It reduces administrative workloads, ensures seamless policyholder onboarding, increases productivity, and ultimately enhances overall efficiency. As such, insurers must opt for the right insurance software systems that are powered by automation and AI technologies. These cutting-edge solutions offered by leading insurance software providers are key to driving innovation and sustainable growth.