Automation plays a significant role in many industries, and insurance is no exception. The rapid innovations of insurtech have thrust data and automation into the forefront of ways to improve and enhance agency operations.
One of the most prominent data automation uses is in the underwriting process. Due to digitized automation processes, agencies are seeing loss ratios decrease and overall premiums increase. According to Willis Towers Watson, over 60% of agencies surveyed say the predictive analytics of automated underwriting have reduced issues and brought down expenses.
Underwriting automation has great value, but the wealth of data and required processing power can be daunting for the average agency. Yet, if your agency can put in place the right processes and people to gain and manage underwriting data, you can see a big change.
Why Invest in Underwriting Automation Insurtech
Data analysis is central to automation, and such advanced analytics can improve customer experience, increase process efficiency, and help inform better decisions in the underwriting process. This tech takes a massive burden off of underwriters who may manually scrub data to validate information before putting forth a policy proposal. With automation, the speed and accuracy of the underwriting process can increase.
Other benefits include making it easier on customers. Predictive analysis through automation can lift the burden of information from potential customers, meaning they will have fewer questions to answer to get their policy quotes. Automation can also improve policy personalization, making it easier for you to provide the most cost-effective quote.
How to Get Started in Underwriting Automation
There are a few “musts” to put in place before your agency can integrate underwriting automation into your processes. Some of those elements include:
- Hire data-minded individuals and partners to manage data gathering and analysis
- Understand what data to target (i.e., what do you need to inform commercial, personal line policies?)
- Employ eforms and other paperless, digitized processes to make data integration easier
Though this list is short, the effort it takes to tackle these areas is significant. It’s your imperative as an agency to ensure you have the right people, processes, and tools in place to employ automated underwriting with fidelity.
What Pitfalls to Watch for When Implementing Automated Underwriting
When introducing any new system or process, there are some common mistakes to watch for during implementation. One of the first is to ensure your management system is up-to-date. By this we mean that your system is able to handle large amounts of data and can easily share data with other insurtech systems. You need the right technology in place before you begin gathering and analyzing large volumes of data.
Another area to pay attention to is who is managing your underwriting data. Whether you’re using an outside partner or have a well-equipped internal team, you need a group of people to take charge of underwriting data processing and analysis. Though your whole staff should be on board to implement this shift in processes, you need a dedicated team to handle the day-to-day work of ensuring data accuracy.
A final focal point is watching out for misclassification of risk. Though automated underwriting processes are quite robust, they rely on human input for some functions. This is why you need a dedicated team to pay attention to your underwriting processes. Small changes like a customer getting a new job, a change in crimes rates in a particular area, or other natural occurrences can drastically change policies. Ensure your team pays attention to these adjustments and enacts them in your underwriting.
Who to Partner with for the Latest in Insurtech
Our Partner Platform team understands that the amount of data analytics needed for underwriting automation is significant, and agencies need the right tools to manage it. Our Partner Platform agency management system suite is designed to handle large volumes of data and easily connect with various insurtech systems.
We work closely with our tech partners to make every step of the underwriting process easier for our Partner Platform agencies, equipping them with the best systems from like-minded partners.