Underwriting Workstations Enable Insurance Transformation

John Belizaire, CEO, FirstBest Systems

John Belizaire, CEO, FirstBest Systems

A transformational outlook is emerging among chief information officers in property/casualty insurance companies. It is a mandate for change and technology enabled growth. In pursuing this mandate, insurance CIOs and their business counter parts are quickly realizing the need for a strategic platform and new workflow tools that can strengthen the mission-critical process of risk assessment. To that end, visionary CIOs are turning to underwriting technology as a driver of transformation for precision and productivity. In fact, according to research from Strategy Meets Action (SMA), a leading industry analyst firm, underwriting ranks as one of the most highly targeted areas for innovation across all business areas for property/casualty insurers.

Policy administration claims and billing systems have traditionally received the bulk of attention for business technology improvements in the insurance ecosystem. Indeed, insurance CIOs have worked with their C-suite counterparts to justify investments in platforms to improve transactional and customer service responsiveness. Such investments were also driven by dramatic changes in customer expectations; and the emergence of non-traditional entrants, who are not saddled with legacy constraints and more nimble in rapidly meeting policyholder, distribution, and market requirements.

Meanwhile, the strategic area of underwriting was generally untouched or underserved from the perspective of game-changing innovation. For many companies, underwriting is perceived to be a predominantly manual, high-touch process. Particularly in the complex arena of commercial and specialty business, the traditional belief remains that underwriting is highly specialized and dependent on conventional handoffs among the participants in the risk evaluation process. Therefore, the practice of underwriting cannot be significantly improved through technology. Fortunately for insurers, visionary CIOs are leading a shift away from old-fashioned thinking. They are helping to drive an acknowledgement of the impact and value of technology-enabled underwriting.

Many CIOs tasked with supporting business initiatives now see underwriting technology as a focal point in an enterprise-wide strategy for improving scalability and growth. In large part, that’s because a modern breed of dedicated underwriting workstations is allowing insurers to directly streamline and automate underwriting workflows, improve teamwork, and incorporate a variety of internal and external data sources and analytics. This results in faster, more accurate understanding and evaluation of risk, a cornerstone of successful and profitable insurance operations.

Underwriting workstations allow insurers to circumvent manual or redundant processes and operate in a digitally enabled, collaborative environment.

Underwriting workstations allow insurers to circumvent manual or redundant processes and operate in a digitally enabled, collaborative environment.

Workstations offer a host of process improvements. Applications can move through the underwriting process more quickly. Supporting documentation, notes, and analysis reside with the electronic file. Managers obtain insight into how long the risk assessment process takes, and gain a deep understanding of bottlenecks or opportunities to improve efficiencies. Workstations enable access to an electronic trail of underwriting process details and allow better decision making across lines of business, for strategic planning, and for regulatory compliance.

Underwriting workstations also expand and consolidate collaboration between underwriting teams and producers to quickly resolve incomplete submissions and make faster decisions about the status of applications for insurance coverage. A specialized underwriting system allows broad visibility to agents and brokers regarding the status of their submissions at all times, in turn greatly improving responsiveness and service to policyholders.

Investments in underwriting workstations allow for markedly improved risk assessment practices. System-driven, rules-based underwriting and customizable checklists ensure underwriting discipline for the entire enterprise, regardless of line of business offerings. Tailored configurability extends the accumulated knowledge of the best underwriters throughout the organization.

Today’s underwriting workstations organize diverse data sources and relational information needed to make informed risk assessment decisions in one accessible, ubiquitous system. A unified, efficient underwriting platform significantly reduces the amount of time underwriters spend gathering information. Of course, CIOs must also lead the efforts to manage all that data, isolate and supply the most valuable data, and help business users and underwriting teams disregard data that does not aid in the risk evaluation process. In effect, underwriting technology supports insurer CIOs and business users with the most agile and responsive platform to operationalize the ever-expanding sources of risk data.

Despite a host of benefits, CIOs also realize that rationalizing underwriting investment can be challenging. At any moment, insurers are likely to be investing in a series of technology upgrades and new projects including, complicated policy administration systems and other improvements to legacy enterprise architecture. Additionally, some insurers perceive that underwriting workstations are redundant because policy systems can contain a limited set of underwriting capabilities. Some CIOs would thus be hard pressed to support underwriting technology enhancements as a top priority.

Significant for the CIO’s mandate to accelerate positive transformation and innovation is the fact that underwriting systems bring a level of efficiency, scale, and precision to the strategic underwriting process not available in policy systems. Those CIOs who have already led their companies to invest in dedicated underwriting software continue to achieve better and faster risk decisions by underwriters— compared to when they relied on the limited underwriting capabilities of policy systems. Moreover, underwriting workstations are specifically designed to integrate easily with legacy or modern policy and other systems. SMA research notably reveals that underwriting workstations can have the highest value when integrated with modern policy systems.

The scalability, collaboration, and risk assessment capabilities of underwriting systems are making underwriting technology investments a necessity. Led by innovative CIOs and their business cohorts, insurers who have made the investment are seeing a range of efficiencies, distinct competitive advantages, and improved top line growth. Among the enterprise benefits are faster, more accurate, and data-driven risk decision making, responsiveness to producers, dramatic increases in submission intake and quality without adding underwriting staff, and lower loss ratios.