While the opportunity for change may be profound, the real question is, What is appropriate and how do you decide what is the best level of automation for your business needs? In simplistic terms, automation in the underwriting arena can be described and differentiated using three categories or levels:

No-Touch Underwriting – Commonly referred to as straight-through-processing (STP), no-touch underwriting uses automated systems to complete all of the underwriting tasks, including risk selection and pricing. No-touch underwriting is prevalent in the processing of standard personal lines policies and some simple commercial business.
Low-Touch Underwriting – In a low-touch underwriting approach, tools and engines assist in the management and tracking of status and processes as well as provide data and insights to help the underwriter make a more informed decision. Low-touch underwriting is often used to handle exceptions that are kicked out of personal lines STP systems. It is possible to process all but the most complex commercial risks using a low-touch model.
High-Touch Underwriting – With a high-touch underwriting approach, the underwriter is directly involved in the evaluation, negotiation, and pricing of the risk. Some automation may assist in workflow management and diary ticklers. This has traditionally been the predominant underwriting model.

More than a few insurers embark on a plan to automate underwriting without really understanding that different levels of automation are possible. Others set objectives for automated underwriting and even invest in a solution path, only to later learn that one part of the organization assumed the end result would be high touch and another part of the organization expected no touch.

Special Reports /

The Jetsons And Underwriting

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