Automated Underwriting: Underwriters Need Power Tools to Tame the Flood of Information
I predict that while you read this, you will get several social media and email notifications. I predict that you will receive at least one text message and possibly one or more voicemails. At some point later today, I predict you will log in to at least one news website, content aggregator, or feed reader and skim the headlines.
In other words, I predict that you are already suffering from information overload and that this condition will only intensify as the day goes on.
I don’t have to tell you that you aren’t alone here. We all deal with information overload on a daily basis. Colleges study this condition and news outlets seem to be in love with the topic—despite the fact that their articles about it feed into the disease itself!
The problem with information overload isn’t necessarily that too much information is a bad thing; it’s that our brains are not capable of consuming, digesting and properly processing all the information thrown at us in a single day. It’s like those lines from Coleridge’s The Rime of the Ancient Mariner: “Water, water everywhere, Nor any drop to drink.” We have access to information everywhere, and yet it’s so overwhelming that we don’t have the mental capacity to really absorb and understand it.
In underwriting, information is vital. The more information we have to process, the more accurate our quotes are and the better our risk assessment is. But with large quantities of applications, increasingly stringent underwriting standards, and the sheer volume of information we now have access to—including Big Data sometimes, it’s difficult for human underwriters to keep up, analyze data and sift through the irrelevant to find the relevant. It’s like trying to drink water from of a firehose.
This is where automation comes in, both for group insurance or individual underwriting. By automating part of the underwriting process, you give human underwriters a leg up that helps them do their job more efficiently. Some systems can give certain permissions to the field sales offices to do perform part of the work. Others allow passing and viewing of information between sales and underwriting teams thereby streamlining the process.
While simplified-issue products can be fully underwritten by an automated system, more complex cases can benefit from the integration of automation and human review. Automated underwriting can be configured to notify human underwriters when certain red flags are found. It can score applications based on rules—regarding medical history or concerning drug combinations or third-party information that wasn’t mentioned on the application. It can then route the application to a specified team of underwriters based on the initial risk assessment or send to “jet issue” if deemed “clean.”
An automated underwriting system gives the insurance industry time savings, better margins, and the ability to maintain consistent standards even as demand rises. These systems not only process and analyze data more efficiently—they can quickly disregard irrelevant data without suffering the mental fatigue and strain of information overload, freeing up underwriters for more complex cases. Allowing more business to be written in less time.
It’s time to give all underwriters the automation they need to do their job in 2016.