Look, But Don't Touch
Automated rules for underwriting have made binding policies a seamless practice, particularly for personal auto and small commercial lines. Consistent guidelines make agents happy and free up underwriters for tougher challenges.
As long as there has been underwriting, there have been rules, and the automation of those rules goes back to the days of the mainframe. But as underwriting profit has become a mission, insurers are looking for more ways to make easy decisions. Underwriting rules are simple logic that can be implemented in any computer language, according to Jeff Chookaszian, associate principal for McKinsey & Co. “What the rules engines do essentially is separate the logic of the decision process from the data and allow you to maintain and build those rule sets in a more flexible way with more analytical power behind them,” he says. A lot of the newer policy administration systems are building that kind of rules capability as part of the system, he adds. Some policy administration systems give the user the option to integrate a rules engine or to use the engine the vendor built in.
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