The Path to Mastering
Collaborative Underwriting
carriers can reach full underwriting capability by combining a modern
Pas with an underwriting system with an agent portal. By Meira Primes
The policy administration system (PAS) is crucial to an insurer’s business. How- ever, PASs, new or old, of- ten fall short when it
comes to automating and supporting
the full breadth of the underwriting
and collaboration part of the business.
PAS functions are based on key transactions, including quotes, new business,
renewals and cancellations/reinstate-ments. The system processes rates, logic
and regulatory information for all states,
coverages and products. It has rules and
workflow capabilities to manage back-end integration, sorts data for claims and
coverage verification and can sometimes
handle billing. A few vendors have delivered more modern systems with Web
front ends that capture information for
underwriters so quoting, binding, policy
issue and subsequent changes can be entered by agents. Some insurers have automated straight-through processing
(STP) for personal lines and small, simple commercial business.
So, why are carriers looking for more
underwriting and collaborative capabilities? The answer depends on business objectives. For many commercial and specialty lines carriers, underwriting efficiency
and improving agent service top the list,
making real-time agent collaboration/ser-vice, expansive STP, knowledge management, advanced workflow and dashboards
missing functions in a PAS.
An insurer may want to consider de-
ploying a comprehensive underwriting
system that comes with a Web 2.0 agent
portal, and can be fully integrated with
the PAS. The combination of a PAS and a
next-generation underwriting manage-
ment system is both complementary and
powerful, in addition to providing a fast
time-to-benefit. This compelling option
helps carriers achieve real-time distribu-
tion-channel service, faster quoting, true
agent collaboration and/or STP. The ap-
proach empowers insurers to focus on
competing, differentiating, innovating
and growing the book of business.
MainstreaMer,
Mover or Master?
The latest research from SMA Strategy
Meets Action on P&C underwriting ca-
pability highlights an Underwriting
Automation Maturity Model. SMA’s
model guides the discussion about the
business and technology capabilities re-
quired for carriers to achieve their busi-
ness strategy and goals, especially in
regard to underwriting automation. The
model highlights three common inter-
sections of underwriting business and
technology capabilities: “Mainstream-
ers,” “Movers” and “Masters.”
According to Deb Smallwood, found-
er of the consulting and advisory firm, a
legacy PAS struggles to position insurers
as Mainstreamers. These systems perform
basic quoting and policy production, but
lack a portal or Web front end, and can’t
support any STP or automated under-
writing. Connecting to third-party data
services and predictive models poses an
even greater challenge. An insurer at a
Mainstreamers’ underwriting level is us-
ing their PAS for automated rating, pric-
ing and even time-to-market improve-
ments. They have basic workflow and
rules and may be able to perform some
STP with automated rating.
More advanced business and technology capabilities, such as enabling extensive external data services, integration and
presenting key internal and external information, or collaborating with agents in
real time, help carriers move to the next
level. Having a more modern PAS with
external data services and advanced workflow gets a carrier almost to Movers’ status, but falls short of one-stop shopping,
balancing art or science depending on
risk, product and line of business. With
one-stop shopping, all data and information, along with a variety of tools, business intelligence, analytics, advanced
workflows and collaboration, take underwriting to the Masters’ level.
To reach SMA’s Masters’ level of full
underwriting capability, with the ability
to quickly respond to market changes,
enter new markets, launch new prod-
ucts, and align the right level of under-
writing automation, an insurer needs
more than a modern PAS. This requires
a combination of systems, data and
tools: modern policy admin, under-
writing system with an agent portal,
external rating, advanced workflow and
rules —and in tandem with advanced
predictive analytics, external data ser-
vices and reporting tools. The combina-
the huMan Factor
With commercial lines, which have
much more complex processes, the PAS
handles data capture, basic rating and
quoting, but leaves many steps to be
handled manually by the underwriter.
For instance, with workers’ comp, after
an agent submits an application, the un-
derwriter will pull and consider supple-
mental data, such as NCCI, D&B reviews
or loss history, and check with the agent
to determine pricing. The underwriter
then keys in the final discounts, sur-
charges or adjustments.
Underwriting is at the core of an
insurer’s strategic business, and
should not be handled as a sideline by
a system that already does some un-
derwriting.“The art of underwriting
is more than just capturing some data
and automatically rating and produc-
ing a quote, bind or policy,” says
Smallwood. “New underwriting
workstation and agent portal tech-
nologies can help automate the more
manual part of the process, including
the back and forth of the submission/
quote process, pulling key external
data, capturing underwriter knowl-
edge, and helping to maintain under-
writing discipline—and policy admin
systems just don’t do that.” INN
Meira Primes is VP for Bedford, Mass.-based
FirstBest Systems.
tion delivers underwriting one-stop
shopping, full internal and agent collaboration as well as dashboards.
