Underwriting has historically been one of the most data-intensive areas of insurance. But when it comes to investing and results, data and information management for issue guarantees at most operators is still incoherent and disconnected. This is the insurance guarantees’ version of the digital divide that we have discussed in this series, and it leads to inefficiency and ineffective insurance.
The gap exists because today’s underwriting platforms have not been developed to meet the needs of a modern digital operator. To see why, let’s take a quick look at the history of these platforms.
The first generation of issue guarantee platforms was built to provide rating systems and core policy management needed to price and administer the insurance guarantee. The technology they run on has changed from mainframe to servers to the cloud, but the platforms themselves are still focused on managing the smallest possible information required to price and maintain the policy.
The second generation of emission systems was created to complement these central rating and policy systems with workflow solutions. Most policy systems used today are in this second generation. They can handle the flow of documents and select information during the process such as carriers̵7; taxation, quotation and issuance policies.
These two generations of issue guarantees are fundamental to modern issue guarantees. But they do not meet the full needs of modern insurance, creating a growing digital divide.
The risk analysis that the issue guarantee does is based not only on rating and policy data in the workflow system, but also on the myriad of data locked in the various documents in an insurance file and information collected from other sources such as website visits, financial reviews, news, websites and more. None of this data that is outside the workflow system can be handled by today’s second generation systems.
To address this, underwriting has tried many things. We have seen operators try many one-off solutions to handle parts of data and analyzes to better help the insurer. An operator I know uses an impressive 92 different analytical tools, models and solutions to help its insurers. Although well-intentioned, these attempts usually make the issue guarantee more complex, time-consuming and administrative.
To meet the needs of underwriting today, we need a third generation of underwriting platforms. This next-generation emissions guarantee platform is basically an insurance-tailored big data platform that can handle all the risk and customer information needed for risk assessment that today’s workflow and policy system cannot handle. In this way, other data, models, analyzes and visualizations needed for issue guarantees can all be managed in a data platform designed to handle all this information, and which can interact with the different stages of the issue workflow to provide insurers with data and insights. need, when they need them.
This future system approach to an insurance data platform can be cloud-based and disconnected from existing policy platforms so that it can be built quickly and incrementally to deliver real-world insurance results with the critical data used to make issuance decisions.
If you are interested in learning more about the third generation of underwriting platforms, I would love to talk to you. I can be reached here.
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Disclaimer: This content is provided for general information purposes only and is not intended to be used in consultation with our professional advisors.