How is automation revolutionizing the insurance underwriting?

Since the breakout of the Covid-19 pandemic, everyone has been on high alert about their health and related medical conditions. In addition to preventive health measures and treatments, getting comprehensive health and life insurance policies has become a top priority. However, this increased curiosity and eagerness has put a strain on the insurance industry sector in our country.

After applying for an insurance policy, a lengthy and stringent evaluation process known as underwriting gets carried out to determine your eligibility. Under this process, the underwriter employed by the insurance company will review the risks associated with accepting your application after making a detailed assessment of your financial assets. Your insurance acceptance or rejection will depend on the appraisal performed by the insurance underwriter.

But since this is a strict time-consuming process, most insurance companies are leaning towards underwriting automation to save time and boost the efficiency accuracy of the process. In this article, we will be talking about how underwriting automation has revolutionized the insurance industry. Keep on reading to learn the benefits of automating the insurance underwriting process.

For risk assessment, premium pricing, and insurance application judgments, insurance companies have traditionally depended on underwriting experts and risk managers. These processes, however, were paper-based until the 2000s, when insurers began using a variety of digital tools to complement manual underwriting processes. Manual underwriting models, on the other hand, come at a high cost to the company: underwriting fees can vary from $50 to $130 per hour, doubling on a headcount basis in some lines of business, and the underwriting process can take days to weeks. Furthermore, scaling up with manual underwriting entails significant fixed expenses as well as higher operating overheads.

These issues were addressed by automated insurance underwriting. To automate the underwriting process, it uses an integrated IT infrastructure, a comprehensive customer (and/or ecosystem) data footprint, and the company's underwriting criteria. In a nutshell, automated underwriting uses artificial intelligence (AI), robotic process automation (RPA), natural language processing (NLP), optical character recognition (OCR), and APIs to access real-time data from third parties in order to map the risk profile associated with an asset or a scenario to your company's business rules.

Before we share how these technology processes can be a life-saver for insurance companies, let's understand why we need automation in insurance underwriting. Here are the top five needs that are addressable by availing of underwriting automation:

Now that we have highlighted some of the top obstacles for insurance underwriters, it's time to share how adopting an RPA within your insurance company can solve these problems. Here are the notable benefits that automation can offer to the insurance industry.

Generally, automated underwriting systems bring millions of dollars in cost benefits, reduce turnaround time by over 95%, and can infer thousands of unique rules when implemented in large-scale contexts.

We hope you have realized how adopting robotic process management in your company can help you boost your operations. Now is the time to understand how you can implement the automation process for your insurance company to offer quick and effective processing.

According to McKinsey, the best-automated underwriting systems combine the best of analytics and human judgment to maximize the value for an insurer. As a result, assessing a system based on the degree of intervention it requires in underwriting alone is not the right approach to assessing such a system's effectiveness. Our team of experts can help you leverage and automate the underwriting process. For a sustainable automation process for your insurance underwriting, reach out to our professional team today!