Intelligent underwriting has the potential to transform and optimize the group, benefits, and worksite insurance industry by using Artificial Intelligence (AI) and Application Programming Interfaces (APIs) to streamline underwriting, expand and manage data access, speed quote turnaround times, improve risk assessments, and optimize business workflows.

The business value of intelligent, AI-powered underwriting solutions, business processes and operating models is driving operational efficiencies, productivity, and profitability. As reflected in Majesco’s 2022 Strategic Priorities Research, 25-30% of insurers have implemented a digital underwriting workbench. Nearly 50% are considering it or have implementation plans underway.

Traditional underwriting is fraught with issues, almost all of which lead to lost business and diminished returns. Group benefits, and worksite insurers who quickly take advantage of this opportunity will be in a prime position to adapt to the changing risk environment, evolving customer expectations, operational efficiency demands, and profitability and growth demands.

Business Drivers for Change

There are a number of business drivers insurers should consider as they evaluate their underwriting business model and operation.

1. Challenges with Underwriting New Business and Renewals – Historically, group, benefits, and worksite quotes pass through many different touchpoints, resulting in slow turnaround times, inefficient collaboration, customer and agent dissatisfaction, and bottlenecks. Underwriters have different levels of expertise across various products and quote complexities, making it difficult for managers to effectively distribute quotes across the team.

2. Speed – Keeping pace is incredibly challenging during high-load periods. A high volume of quotes requiring an underwriter’s review can slow down processes due to an inefficient allocation of human resources. As a result, quotes often sit for weeks before they are turned around, causing long turnaround times and lost business.

3. Data Intake – To create a group, benefits, or worksite quote, sales and underwriting teams must collect and process numerous pieces of information from RFPs, such as past plan booklets, policy summaries, employee census data, previous claims experience, and general client information (industry, company size, etc.). Data is delivered in various unstructured formats, making it difficult to automatically process it. Underwriting teams waste valuable time collecting, processing, and rekeying data. This leads to human error and long turnaround times. Errors (obviously) reduce the precision of automated underwriting decisions. Insurers can find themselves with inaccurate rates applied across large books of business. The result of inaccurate pricing, if high, might simply lose the initial contract. If it is low, it may result in a contract with higher than anticipated claims. When pricing is accurate, insurers can remain competitive and consistent in their underwriting decisions.

4. Scalability – There are various sizes and complexities associated with different group, benefits, and worksite products. Add to that, emerging risks, medical advancements, socioeconomic and real-time factors that underwriting must consider for complex cases. Underwriting’s complexity can make it difficult to scale. Systems often lack unified solutions to properly rate and quote products of complex size and division class structures. Without a scalable automated underwriting system, insurers resort to manual processes while missing out on opportunities to capture large markets and expand their business.

5. Poor User Experience – Traditionally, there is friction between underwriting and sales processes, including in-person meetings, phone calls, medical exams, paper-based forms, and long turnaround times. Customers and distribution partners have had to tolerate long wait times and cumbersome processes. Poor experiences and reduced win rates deteriorate relationships.

Advantages of Intelligent Underwriting

What are the value proposition and benefits of intelligent underwriting? There are several aspects insurers should consider as they evaluate their underwriting business model and operation.

1. Enhanced Pricing Capabilities – A vital advantage of intelligent underwriting is the ability to manage and automate quoting and rating of multiple products for groups of all sizes and complexity. By using various statistical sets and experience data, an intelligent underwriting workbench can help insurers generate quotes that accurately reflect their clients’ risks at scale. It can analyze past claims experience and rates or compare a business’s historical claims and rates with other companies in the same industry within the insured’s block of business.

Gathering RFP data “intelligently” to automatically generate proposals from quote results is key. The Majesco Intelligent Sales & Underwriting Workbench for Group and Voluntary Benefits Insurance does this by generating quotes using current and or past experience rates for groups up to and beyond 100,000 lives with multiple class and division structures. One carrier recently experienced a 92% reduction in the time needed to assemble a quote.

Furthermore, an intelligent underwriting workbench can do so much more. It can identify upcoming renewals, retrieve claims and financial data from internal and external systems, then prepare quotes based on the current and past plan designs with updated census data. It can assess risks and rate automatically – or forward the renewal for manual underwriting review if flagged.

2. Accelerating Underwriting Processes – The COVID-19 pandemic opened the potential of accelerated underwriting, supported by digital self-service tools and advanced technology. Accelerated underwriting in group, benefits, and worksite means expediting the underwriting process for specific insurance policies (e.g., skipping an in-person medical exam), such as for life or disability insurance, to make it faster for plan members to get coverage.

Digital insurance ecosystems and self-service portals allow insurers to access digital health data such as medical claims history, electronic health records, and fitness data from IoT devices. Importing this data into intelligent underwriting systems enables insurers to generate preliminary risk assessments and, based on the results, determine whether the applicant is eligible for accelerated underwriting. This streamlines and accelerates the underwriting process to deliver faster and more personalized customer experiences, increase customer retention, and decrease costs.

A survey by LIMRA found that 74% of insurance companies say accelerated underwriting has reduced wait times for policies, 59% say it has lowered policy issue costs and 37% say it has increased sales.

3. Intelligent Workflow and Management – Group, benefits, and worksite underwriting isn’t a linear process. Underwriters don’t necessarily work through quotes like a checklist. Instead, underwriters need intuitive and action-oriented workflows that prioritize quotes with the highest chance of closing. Here’s how AI can help: An AI-powered underwriting workbench can analyze workload volumes against the underwriting team’s experience and performance history to assign and queue work to those with the appropriate skills.

During high-load quote periods like renewals, solutions like Majesco Intelligent Sales & Underwriting Workbench can suggest and route work for the most effective distribution of quotes amongst underwriting teams, taking into consideration each underwriter’s previous experience and capacity to finalize a quoting case. Additionally, AI-powered intelligent underwriting can intelligently prioritize and triage quotes and RFPs with the best chance of closing based on historical success factors such as appetite, winnability, and task management directly within the workflow. This ensures underwriters spend their time on quotes with the best chance to drive revenue. Intelligent underwriting can optimize and automate underwriting workflows giving insurers a critical advantage to enhance operational efficiencies, reduce costs, and increase closing ratios.

4. Employing AI to Reduce Manual Processing – Manually processing unstructured data from sources like plan booklets, employee census files, etc., into structured formats often leads to slow turnaround times, human errors, inaccurate rates, and a poor downstream customer experience. Research by McKinsey finds that 30-40% of an underwriter’s time is spent on administrative tasks, such as re-entering data or manually executing analyses. AI and data ingestion technologies can automate RFP and census data intake and convert raw data into structured formats.

For example, the Majesco Intelligent Underwriting and Sales Workbench has an AI census scrubber capability that analyzes, corrects, and supplements census data in any format, including any division or class structure. It can learn to intelligently make decisions regarding missing and incorrect data, record confidence levels of its work, and trigger human intervention if needed. This capability has saved as much as 800 man-hours per month. Using AI to streamline data processing and intake is critical to decreasing quote turnaround times, reducing input errors, improving closing ratios, and allowing underwriters to focus on more high-impact tasks.

5. Managing Data Flow with APIs – Next-gen intelligent underwriting solutions are part of a broad digital ecosystem where data moves in a cycle seamlessly from one solution to the next and application programming interfaces (APIs) are the backbone.

APIs are mediums through which multiple applications, devices, and data interact and share information with each other. With the right APIs, insurers can extract value from various data sources, and store, share, retrieve, and use the data across the organization. For example, for front-end sales operations, APIs can pull a prospect’s experience data from CRMs, plus gather information such as the desired benefits plan from RFPs, then feed it to core underwriting systems for quoting and rating. Similarly, APIs can push the sold quote data from underwriting platforms to policy solutions and automatically update CRMs with details about the new business and client group. Carriers that can most effectively manage and leverage high-quality data while complying with data-exchange standards can extract more value from their automated underwriting systems and enhance experiences for customers, internal staff, and distribution partners.

From Legacy to Next-Gen Intelligent Underwriting

Now is the time for insurers to embrace the potential of next-gen intelligent underwriting solutions that leverage AI and APIs to manage data flow, automate manual data processing, streamline quoting and rating, accelerate underwriting, and optimize workflows. The result – insurers can speed up quote turnaround times, cut costs, enhance underwriting productivity, improve closing ratios, and provide a seamless customer experience.

20+ major carriers across North America have adopted Majesco Intelligent Sales & Underwriting Workbench to take their business to a new competitive level. Our platform offers a suite of components to help automate employee benefits underwriting, allowing your group, benefits, and worksite business to succeed in a new era of intelligent underwriting.

By Denise Garth