In our latest content series for P&C insurance providers, we discuss the five main underwriting challenges. This post dives into the second challenge: the high costs of manual processes in automated underwriting for P&C insurers and how an advanced underwriting workbench can address this.
In our last blog, we’ve discussed how cost performance for property and casualty (P&C) carriers has not improved in 15 years—and how limited access to better data is one of the barriers to success. Too often, this data is stored in disparate, unconnected systems (sometimes even within the same carrier’s technology infrastructure). Unfortunately, data intake isn’t always consistent, so underwriters are left with a mess that they have to clean up—manually.
This stagnation has made employee productivity an indispensable differentiator among competing providers. Insurers must focus on increasing productivity while decreasing costs. Unfortunately, P&C firms have traditionally underinvested in the very technology that can achieve this.
The Hidden Costs of Manual Underwriting Workbench Systems
Too often, underwriters are forced to work with—or are otherwise overly reliant on—manual processes across multiple, disconnected legacy systems. Having to enter data multiple times in multiple places leads to high error rates, slow quote turnaround times, and a lack of visibility in decisioning.
According to McKinsey’s observations, “anywhere from 30 to 40 percent of underwriting’s time is spent on administrative tasks, such as rekeying data or manually executing analyses.”
Rather than writing better business faster, underwriters are forced to spend time on administrative, non-value added tasks. According to McKinsey’s observations, “anywhere from 30 to 40 percent of underwriting’s time is spent on administrative tasks, such as rekeying data or manually executing analyses.”
To overcome these inefficiencies, many P&C insurers are implementing an underwriting workbench to support automated underwriting processes, reducing manual workloads and improving accuracy.
Due to these inconveniences—and fueled by the need for digitization—the tide is turning, though there is still work to be done. According to the Cap Gemini World Property and Casualty Insurance Report 2024 Global Insurance Executives’ Survey, only around 8% of insurers are “underwriting trailblazers,” who actively define automated, data-driven recommendations or decisions.”
Click here to learn how Chubb modernized their tech stack with Unqork
McKinsey: Data on the Impact of Automation
To increase underwriting productivity and manage costs, P&C carriers need to focus on automating activities that don’t add value. McKinsey estimates that up to 40% of P&C carriers’ expenses are locked up in their top 20 to 30 core end-to-end processes, like underwriting—costs that digitization can reduce, and in some cases, eliminate.
And according to the Cap Gemini report, trailblazers are able to “turn advanced underwriting capabilities into tangible benefits, and they rarely miss business targets for efficiency, accuracy, and customer/broker experience – significantly outpacing conventional insurers.”
Key Benefits of Automated Underwriting Workbench Systems
Unqork is reimagining the application development process to help P&C firms digitize the rate, quote, bind, and issue processes—enabling faster speed to market.
Ranked in the top quadrant of Celent’s Underwriting Workbench Report for Global Markets, Unqork delivers both the advanced decisioning tools and process efficiencies of today’s market demands. It is also built on a fully extensible platform, so firms can quickly and easily tailor underwriting processes to meet their own needs.
Replacing manual, repetitive tasks with a completely digital underwriting process provides the following benefits:
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Accelerated underwriting: Reduce processing times, cost, and administrative load by fully digitizing the customer lifecycle from quote request to proposal generation.
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Reduced data re-entry: Mitigate human error and the need for human-in-the-loop intervention by automating manual processes, incorporating built-in approval controls, and maintaining an audit trail.
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Improved customer and agent satisfaction: Enhance client, agent/broker, and underwriter experiences through modern UI and self-service capabilities.
Access Celent’s Underwriting Workbench Report for Global Markets, including a detailed analysis of Unqork’s capabilities.
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