Automated underwriting: simplicity and efficiency

01 February 2009 Bernard Ross, RGA Reinsurance

Automated underwriting solutions simplify the underwriting process, thereby improving efficiency and reducing costs.

As technological advances continue, more and more life insurers are adopting various forms of technology to improve product and service delivery and to make life a lot easier for intermediaries and clients.

Automated underwriting systems capture structured data via some form of input and render a risk classification decision based on pre-programmed underwriting decision rules. This eliminates human bias and also reduces the scope for human error, resulting in quick, consistent underwriting decisions for standard life insurance cases.

Integrating technologies

Many of today's automated technology solutions include a Web-based underwriting system coupled with a sophisticated, flexible data-analytics engine that enables immediate underwriting.

This has moved the underwriting process from a manual, back-office operation to a simplified, automated front-office process for the majority of policy applications. With carefully structureding of the underwriting questions and rules, as many as 80% of applications can be automatically underwritten. Automated underwriting engines enable these policies to be underwritten on standard terms, allowing the industry's skilled underwriters to focus on the more complex cases.

This reduction of time between application and the issuing of the policy, by having moved underwriting to the front end of the application process, increases sales conversion rates, which is important for insurers and intermediaries.

Addressing the skills crisis

Automated underwriting also offers insurers a solution to the problem of the reduced number of skilled underwriters in the market by handling the majority of policy applications automatically. However, this technology will never replace the need for skilled underwriters, as complex cases require the attention and skills of experienced underwriters.

Brokers and intermediaries are also benefiting from the speed of policy applications and the early clarification provided regarding underwriting decisions.


The fact that this automated underwriting technology is also easily accessible, as 'off-the-shelf' solutions, such as the Automated Underwriting and Risk Analysis (AURA™) software developed by RGA Technology Partners (RTP), means that insurers can utilise and benefit from this technology without the hassles and issues commonly associated with the development and roll-out of bespoke automated underwriting software packages.

Transforming the distribution model

This technology has also been a catalyst for a shift in the distribution model in the life insurance industry. Automated underwriting systems have allowed direct tele-underwriting and bancassurance channels to grow into viable business solutions, increasing the reach insurers have into previously untapped markets. Tele-underwriting also allows insurers to gather good-quality risk information on which to base policy decisions, which reduces time and costs and improves service levels.

Creating growth

Automated underwriting is therefore a critical tool to enable further growth within the life insurance industry, as it offers a platform to reach new markets, reach deeper into established markets and create a more competitive industry. Automated underwriting also simplifies the stumbling-block that the underwriting process is perceived as, allowing insurers to improve customer service, risk selection and the pricing for these risks.

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