Automation is changing the face of not just the commercial underwriting process but the commercial lines marketplace itself. The days of segmenting the market into small, midmarket, and large commercial accounts based on premium size are passing.

"Now, it is [segmented] by whether or not carriers can automate the [underwriting] process on a type of account as determined by whether consistent data is available and the business model makes sense," reports Mark Gorman, strategic research advisor in TowerGroup's insurance practice. Those accounts that can be automated fall into the "flow" category, while accounts requiring intervention at one or more points in the process define "transactional" business.

In pass-through flow systems, carriers use agent portals or agency management system bridges to capture applications electronically; rules engines to guide iterative questioning and make eligibility decisions; integration with third-party data sources to collect additional underwriting information; and predictive analytics to project account experience to support further automated underwriting and pricing decisions. Passed-through quotes are returned to the agent in a real-time, straight-through process.

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