Can you achieve straight through processing in your insurance company? This is a question that bothers many insurance providers. The answer is – it depends. While there is no one-size-fits-all solution to achieve straight through processing (STP), it is indeed possible to avail of its benefits with the system that corresponds to your requirements.
Before you determine the type of underwriting software your company requires to achieve STP in insurance, you need to understand its necessity. STP implies no, or minimal, human intervention in the insurance application processing. This ensures faster turnaround times and more accurate services for the customers.
Why is STP important in the insurance sector? In the volatile market conditions, competitive pricing alone cannot guarantee profits for an insurance company. Only when you combine it with reduced costs is it possible to achieve profits. This is where STP comes into the equation; it plays a significant role in determining your profits or losses.
Now that you have decided to achieve STP, the next task is to choose an appropriate system for this purpose. The first thing you need to decide is whether you need complete or partial automation of the risk analysis and underwriting process. You may also opt for a hybrid solution if you are uncertain about this.
If you opt for automation of the entire risk analysis and underwriting process, the system will complete all tasks associated with this, right from data collection from the applicant, analysis of the risks based on this data and make underwriting decisions about the right policy and premiums for the applicant.
If you opt for partial automation of the process, the data collection may be completed by the trained call centre staff members in your company. The system uses this data to assess risks associated with the applicant and arrive at underwriting decisions. You may scale to complete automation of underwriting process in the future.
The hybrid solution offers the best of both worlds. While the simpler applications are processed by the system, the applications involving complexities are referred to the professional underwriters. It can be the right choice if you are not sure whether complete or partial automated risk analysis and underwriting is suitable for your company.
It is possible to enhance straight through processing of insurance applications with the right system. The next question is – how does the automation of the risk analysis and underwriting processes translate into profits? The most important thing that this step saves is the time spent on insurance application processing.
With the faster completion of the insurance application lifecycle, the automation of the underwriting process ensures reduction in costs. Moreover, the professional underwriters are freed from the non-productive, repetitive tasks associated with manual underwriting. This makes it possible to use their proficiency for more productive tasks.
Another advantage of straight through processing of the insurance applications without human intervention is the reduction in errors and omissions. When there is no necessity to key in essential data manually at each step of the underwriting process, it becomes easier to avoid these problems and ensures retention of customers.
Andy Floweris a professional underwriter. He provides a brief overview of the ways in which straight through processing in insurance may be beneficial for a company. He suggests that you choose an underwriting system that corresponds to your business requirements.