How can AI driven submission automation propel topline growth for commercial insurance carriers?

Nov 13, 2020

Insurance | 4 min READ

AI technology is poised to drive a new wave of growth in the global insurance sector. Thanks to advancements in AI, insurers can look forward to steady gains in profitability, going from $2951 billion in 2018 to $3587 billion by the end of 2022. And a big part of this is intelligently automating mundane processes to reduce the need for human intervention, freeing up efforts for value generation. One of the areas that could gain significantly from AI is the automation of new business submission processes.

Challenges Faced by Insurance Underwriters Today

A day in the life of an underwriter is marked by several complexities. Let’s imagine that Alex is a typical underwriter – what does this job entail on a daily basis?

Alex processes many applications forms every week, covering a massive breadth of policy types, each with its own nuances. As the business grows, the volume of submissions rises exponentially, adding to the workload. As a result, Alex is left with little to no time for upskilling, exploring the latest market trends, and introducing value-generating innovations in the underwriting process at the company.

Here are five common challenges Alex faces:

There is a varied set of documents to reconcile. Brokers, agents, and customers submit their files in multiple formats that need a lot of effort when extracting the data.
ThereThere is no analytical model that will identify instances of incomplete information. This places enormous responsibility on the underwriter’s shoulders — if Alex misses a gap, it could delay the underwriting process, leading to customer dissatisfaction.
ThereThe dependence on manual effort means that there is always a risk of Alex making an error. This is compounded by growing submission volumes, policy types, and data sources.
ThereThere is no one, unified platform Alex can use to track the submission process. As a result, there are repeated follow-ups with agents/brokers, further diverting precious time.
ThereFinally, the onus of clearing or rejecting the submission is on Alex, without any assistance from advanced technology systems.

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AI-led submission processing has the potential to turn this on its head. It will not only automate basic task performance, but it can also help to make intelligent decisions and augment underwriters' capabilities. As a result, Alex gains from freed up time that can be rerouted to value generation, while also actioning daily duties with confidence. It also improves the customer experience – for example, one insurance company used AI for reducing the number of questions during submission for 32 to just seven. The customer no longer has to sit through the lengthy questionnaires typical to the industry, and can get the quote in a fraction of the time.

What Does AI-led Submission Automation Look Like?

First, AI simplifies the data ingestion process like never before. It takes the standard ACORD forms received by the underwriter and automatically extracts the data. Alex can feed in unstructured sources such as agent emails as well. Next, this data is enriched with additional information from third-party systems, so that underwriters don’t need to manually reconcile various sources. Finally, the submission is AI-validated and any exception/error is reported immediately.

AI-led submission will also help to achieve augmented underwriting goals. For example, the data entry into policy systems for rating risk, pricing quotes, and issuing policies is now automated. Alex can access AI-led assistive directions as well, as the built-in models continuously learn from decisions made in the past.

Alex would be able to oversee all of this on a unified portal — and this is scalable as per the insurer’s business curve. There’s even the availability of pre-configured business rules that lets Alex perform pre-clearance for specific submission types. This will make sure that the customer experience is not impacted by a lengthy quotation process, and loyalty improves due to the speed/convenience Alex provides.

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Clearly, AI can transform how underwriters approach their position on the insurance value chain. From being process managers and caretakers of iterative tasks, they can devote more time to generating value, building relationships with customers, and ensuring that they stay ahead of the innovation curve.

Key Benefits of an AI-Empowered Submission Process

AI doesn’t just make underwriters’ life easier. It can significantly impact the business bottom line by:

Reducing costs

as overheads come down due to efficiencies in the submission and risk assessment process

Increasing Direct Written Premium

as insurers can write more business/issue more policies at the same level of time and resources

Strengthening profitability

as augmented underwriting leverages the power of AI and human judgment to ensure healthy margins

Enhancing the customer experience

as the number of follow-ups shrinks dramatically, and the end customer receives a resolution faster

Thanks to rapid advancements in AI — such as Optical Character Recognition that turns unstructured data into machine-readable information — the underwriting process no longer needs to struggle with manual inefficiencies. The future of underwriting will be automated, intelligent, and customer-focused. And, spearheading this change, are underwriters like Alex who intelligently apply AI technology to streamline the submission process.

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