This guide has been developed for insurance executives who are concerned about their ability to quickly react to the modern world of underwriting. In this guide, executives will learn:
1. Why traditional underwriting processing is not meeting the needs of the insured
2. How underwriting is changing and how new technology is driving this evolution

Traditional Underwriting No Longer Works

The heart and soul of insurance is underwriting. After submitting their application, insurance applicants put their fate — and pocketbook — in the hands of underwriters, who must make insurability decisions based on a complicated set of factors.

In a perfect world for underwriters, teams would have access to accurate, complete information in the underwriting database, they would have plenty of time to make decisions, and they would make judgments based on uniform, quantifiable criteria. New underwriters would be readily available for hire, and easily trained to make accurate assessments of risk.

The reality is different. A greying underwriting workforce threatens to leave insurers with crucial skills gaps. Underwriting databases are incomplete and sometimes out-of-date or inaccurate, and teams face a time crunch: the longer it takes between an insurance application and the resulting underwriting decision, the more customers decide to take their business elsewhere — or simply choose not to purchase at all.

As a result, underwriters at most insurance companies today find themselves caught in a balancing act in pursuit of information efficiency. In the absence of complete information, underwriters have to decide whether to manually seek out supporting sources of information — which is costly and extends the cycle time to render a decision — or accept additional risk by making a decision without complete data.

Underwriters can only make three basic choices for any application: accept it, reject it, or accept it with modifications. While the first two are relatively straightforward (though often applied in a non-uniform fashion), modifications and changes are, in the traditional underwriting process, highly dependent on human skill and intuition. Less-experienced underwriters are less aware of their full range of options for making modifications to policies, leading to a non-uniform, sometimes sub-par customer experience.

As experienced underwriters retire and other industries, including banking and technology, siphon off new talent, insurers struggle to adapt their manual, experience-dependent 20th century underwriting processes to an automated, data-driven, 21st-century world.

Re-imagine Underwriting Process

A new generation of disruptive insurance companies understand that speed is critical in delivering a positive customer experience.

Underwriting a typical life insurance policy take 2-6 weeks, and a P&C policy may take days to weeks.

This is an area ripe for disruption and modernization.

When applications involve too many steps or long waits, digital consumers — now acclimated to customer experiences based on instant gratification — abandon the application process and move on to another, faster insurance product.

To move beyond traditional underwriting requires moving to a process that is conversational and automated, rather than forms-based and manual. Let’s take a look at what the process looks like, reimagined from the ground up:

Automated systems

  • They gather as much information as possible from existing sources within the organization, reducing requests for applicants to re-submit duplicate information
  • Other supporting information is integrated automatically from public sources, such as social media, Open Data projects, state DMVs, and banking institutions

Artificial Intelligence

  • Artificial Intelligence monitors compliance with underwriting standards, and instantly provides recommendations for accepting, rejecting, or amending the application
  • Process automation automatically forwards underwriting decisions to the best underwriter, based on availability, skill set, and authority limits

360-Degree View

  • Underwriters get a 360-degree view of all policies and coverages currently in place, as well as the policy being requested, and receive an automatic recommendation based on overall customer value
  • Real-time automated monitoring of the book of business, via dashboards and management alerts, instantly validates the mix of business and identifies potential issues

Workflows & Renditions

  • Automated workflows communicate underwriting decisions properly within the organization, as soon as they are made
  • Integrated document composition engines automatically generate the necessary documentation required to bind the policy
  • Information collected during the underwriting process automatically populates in accounting, statistical, and monitoring systems, eliminating the need to transcribe or re-key data

Analytics

  • Analytics automatically flag any cause that would prompt the insurer to cancel a policy within the limits put in place by state regulatory entities
  • Underwriting managers can use management dashboards for total visibility on individual underwriter performance, including machine-learning based suggestions for additional training or corrective actions.

Stop Relying on Legacy Information Management Systems

Insurers have only a few opportunities to positively impact the customer experience with a modern claims management solution. Underwriting is among the first opportunities insurers have to make a positive impression.

Today, the customer expects a frictionless and omnichannel experience. In this way, insurers aren’t just competing against one another: they’re competing against best-in-breed customer experiences from other industries. Customers now demand speed, transparency, and consistent communication across the board — and if application processing is slow and involves frustrating, repetitive steps, they won’t commit.

In spite of customer expectations rising at record speed, many insurers continue to rely on legacy systems that are slow, inefficient, and make access to data difficult. Traditional insurers cannot keep up with the new disruptors unless they modernize and future-proof their underwriting applications, and reduce or eliminate their reliance on legacy systems.

A customer-focused mindset is the only way to compete effectively. Insurers that deliver a superior, fast, omnichannel customer experience will succeed. All others will fail.

Ready to reimagine your underwriting process to increase efficiency, retain and grow your customer base, and ensure your long term viability — all while delivering the highest level of customer service? Nuxeo has the tools and experience to make it happen.

For more information on how Nuxeo can power your next-generation underwriting application, check out what why we excel at content management for insurance companies.