Underwriting is the key to success in the insurance industry. Understanding the full risk involved before taking on the liability of insuring is the most crucial step of the business. Insurers typically work through a strenuous process examining the applicant to various levels of detail to fully understand the every part of the insured exposure before they issue a policy. This process can take weeks for average policy and months for more extensive policies. Bad decisions made in underwriting quickly come back and bit the insurers in the bottom line, sometimes for millions of dollars.
The insurers with the most thorough underwriting process typically have the strongest ratings. Underwriting procedures are cumbersome, deep in detail and extremely meticulous processes. Because of those processes, insurers also invest extensive amounts of funds into their underwriting department. Unfortunately, these costs and delays in policy issuance adversely affect the customers and overall satisfaction with their companies.
With the implementation of new data management initiatives, insurers are making a painful underwriting process much more pleasant, for both them and their customers. The underwriters can now use data insights, inform decisions, drive innovation and improvements. They also are now finding it easier to better understand and subsequently assign risk, leading to greater profitability. These changes in underwriting are truly a game changer for the industry and their customers. Underwriters now have more accurate insights into situations and circumstances that allow them greater latitude in their decision making. The process is becoming so much more streamlined that some industry leaders are reducing their underwriting period by weeks. Customers will significantly benefit from these changes and insurers will enjoy reduction in risk.
The insurance industry have complexities in their business model that most industries cannot imagine. However, their customers do not understand and will not tolerate long delays in product delivery or further burdening costs from poor risk assessments. Insurers will become stronger across the board in service delivery and profitability. These changes will drive competition and create stellar customer service experiences.
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