Coming of Age for Automated Underwriting – Infosys

Article Synopsis :

The business benefits of end-to-end automation and straight-through processing renders the implementation of  automated underwriting solutions as one of the key technology investments in the insurance industry in recent times.

Automated underwriting solutions can deliver significant business benefits

In the research paper “Commercial Insurance – Coming of Age for Automated Underwriting”, Muthukrishnan Nagarajan from Infosys takes a closer look at the path to underwriting automation and the deployment of true straight through processing (STP) solutions in commercial insurance.  As articulated in  the paper, the path to automating commercial underwriting is filled with many challenges and insurers across the world are faced with the following common questions related to business, IT and organisational change management while they take on underwriting automation:

Business

• What are the types of risks and products to be considered within the portfolio for automated underwriting process?
• What level of complexity is involved while determining premium?
• What level of automation should be incorporated into underwriting decisions?
• What level of delegated authority am I comfortable with?
• Should I implement process improvement across new business, underwriting (rating, business rules), claims and distribution channels before automating the underwriting process?

IT

• What IT (systems, technology) and people investments are needed for automation?
• Will existing systems (e.g. front end, CRM, claims) with policy administration system (rating, rules, UW) seamlessly integrate to provide a straight through processing (STP) solution?

Organization change management

• What could be the impact on underwriters and underwriting support teams due to the implementation of automated underwriting solution?
• What level of training should be imparted to stakeholders (internal and external)?

The paper also highlights that underwriting automation has proven to be an effective approach to enhance an insurer’s business across multiple dimensions. The paper  lists the following value enhancers of automated underwriting:

• Revenue and profit
• Operational cost
• Innovation and transformation
• Agility Adaptability / ease of doing business
• Employee / broker  retention
• Quality and constancy
• Outsourcing / offshoring

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