Is it possible to achieve consistency in insurance decisions with the use of an automated underwriting system? The automation of the underwriting tasks seems to be the trend nowadays. You need to find out a few details about this before you determine whether it is possible to achieve this goal.
Why is consistency necessary? Different insurance applications that contain different medical and personal details may lead to different decisions. However, if similar applications lead to different decisions, consistency is marred.
It is important for an insurance company to maintain parity in its underwriting decisions. If the underwriting decisions are inconsistent, it may create a poor impression of your company among your customers. It is, therefore, important for a company to ensure that similar decisions are arrived at for similar applications.
The problem, with manual underwriting, is that the decisions are more dependent on individual underwriters than on a standard set of rules. The decisions that the professional underwriters reach at depends on their knowledge and skills.
Though professional underwriters follow certain standards to make decisions, it is not possible to maintain consistency in these decisions, especially if there is a large team of underwriters in your company. The problem acquires even bigger proportions if a complex application requires the involvement of professionals at various levels of proficiency.
How does the automated system improve consistency? Automated risk assessment involves no, or minimal, human intervention. While an underwriter depends on his/her knowledge and ideas to reach a decision, the system depends on the set rules.
The decisions arrived at by two professional underwriters from similar applications may differ because of the ways in which they consider the details. However, this inconsistency does not affect an automated system. It does not depend on ideas, but rules, to arrive at underwriting decisions for applications processing.
Every insurance company has specific policies, products and pricings and set criteria to determine which products correspond to which applicants. When it incorporates an automated system, it works as per the rules.
It is important to choose a configurable automated underwriting system. This gives you the option to incorporate your criteria and set up your rules. Again, if this involves a complicated process, you may face more hassles than you bargained for. Therefore, it is important to understand the way the rules engine works before you choose a system.
What are the advantages of consistency? It is possible to ensure customer satisfaction when you avoid inconsistencies in the underwriting decisions. This creates a favourable impression of the company for your customers.
The improvement in consistent decisions for insurance applications not only ensures the retention of your existing customers, it also attracts new ones. This brings in more business for your company and enhances your chances of profits. With time, this increases the reach of your insurance products and services.
An automated underwriting system also makes it easier for the employees of your company to complete the tasks with ease. While professional underwriters have more time for more complex matters, the simple application processing is completed by the system.
The betterment in consistency is also possible with the partial automation of the underwriting process. In this setup, the trained staff members of your company accumulate data from applicants, via a telephone interview, and the system does the risk assessment and underwriting based on this data.
It is important to focus on the type of automation that your insurance company can benefit from. If the paper-based manual processes seem too complicated, it may be the right time to automate the entire setup. If, however, you want to test the waters before you take this step, partial automation may be more appropriate for you.