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April 14 2015 | Deb Smallwood

As SMA’s Partner Karen Furtado wrote in last month’s blog post about Core Systems, “now that the insurance industry recognizes modernization as an indispensable tool for remaining competitive, it is worthwhile to take a step back and look at the technical capabilities that insurers really need…” With underwriting, this requires an underwriting platform that extends beyond the policy administration system and optimizes and maximizes the prized experience and expertise of the underwriters themselves.

Today’s environment is both exciting and full of infinite possibilities for the future of underwriting. Advances in the electronic exchange of information have benefited the insurance industry in major ways. One example is apparent with the portals and exchanges that are making it easier for agents to submit business opportunities. Given the ease, more submissions are coming in the door. This increased workload coupled with new data sources for validation and verification leaves underwriters at a tipping point. With increased demand and increasingly more complex variables, they need a solution that gives them enhanced capabilities that extend beyond the basic same old way of doing things.

In today’s competitive market, the ability to issue a quote for every desired risk is critical. The power literally has shifted to the palm of the consumer’s hand where they get instant gratification via their mobile device. For some insurers, not being able to handle the volume of quotes that are being submitted to them means leaving significant money on the table.

Therefore, a modern policy admin system is necessary for its ability to automate the processes that are performed by the underwriting department. These systems automate the data capture, base rating and rules, and final pricing, and they manage formulas and document production for all risks. They process transactions for new business, renewals, endorsements, cancellations, reinstatement, etc. But, for complex risks, the risk analyses and evaluations that are determined based on information about credit, hazards, financials, and loss experience are made outside the policy admin system. Automation supporting these decision-making processes takes place outside the policy admin system. SMA research shows just 37% of the entire underwriting process is managed via the policy admin system.

Realize that the modern underwriting platform is not, should not, and cannot be a standalone system. Nor is the modern policy admin system a standalone solution.

Before that harsh reality sets in, realize that the modern underwriting platform is not, should not, and cannot be a standalone system. Nor is the modern policy admin system a standalone solution. Now, the two (underwriting platform and policy admin system) can and should be interconnected with the ability to perform the complex functions mentioned above.

One of our SMA Imperatives is “Interconnect Intelligence for Underwriting.” We write more about the importance of modern underwriting here, but the conclusion is that nothing in modern insurance can happen in isolation, in a traditional silo. Those days are over, but fortunately, the technology is available to support current and future needs. The key is finding the right connection points, the right technology, and the right fit for your organization. Today’s real-time, big-data, high-volume market dictates the same from your company’s system, and that is why modern support for underwriting requires more than just a policy admin system. 

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To learn more, please contact:
Deb Smallwood
Founder & CEO
Strategy Meets Action