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Are manual processes holding your underwriters' business back? Are your underwriters tired of dealing with inaccurate data quality after long processing times, lost premium opportunities due to missed submissions, or manually checking submission completeness? Manual processes can work, but they often lack efficiency and can lead to high loss and expense ratios due to inaccurate risk selection. It's time to consider the power of automation. In this blog, we'll explore the benefits of digital process automation (DPA) and how it can revolutionize your underwriting operations.
The Cost of Doing Nothing Framework – Submission Processing Example:
To understand the impact of automation, let's start with a simple calculation. Total UW team expense divided by the total number of submissions processed equals the UW cost per submission. Businesses must continually adapt and embrace new technologies to streamline operations and create frictionless workflows.
Manual Processes vs. AI-Led Automation Processes:
53% of underwriters' time goes into performing manual tasks. Manual processes may yield results, but they come at a cost. They are often slow, leading to missed submissions and delayed quote issuance. They also block the underwriters' time, are error-prone, leading to inaccurate risk selection, and premiums can lead to increased loss ratios, expense ratios, and inefficient underwriting. On the other hand, technology-assisted processes are fast, accurate, and eliminate the need for further human intervention, leading to data-driven underwriting and seizing the premium opportunities by addressing more submissions.
What Is Digital Process Automation (DPA)?
DPA eliminates the inefficiencies of manual processes by cutting out manual keystrokes of the underwriters. Errors are minimized, quality is consistent, and the process becomes efficient and fast. With automation, you also gain the ability to track the audit trail and access submission data from a centralized location.
Why Digital Automation Processes Are Better:
The advantages of DPA are numerous. Underwriters will be able to access accurate data quality, increased Quote Issuance, increased productivity, reduced underwriting costs, and data-driven underwriting. Underwriters will be more efficient, helping in retaining and attracting talent.
Process Automation Blockers & Solutions:
Despite the clear benefits of automation, 82% of underwriters are concerned that technology will negatively impact the scope of their role. Common barriers include the fear of change, concerns about cost, overwhelmed IT teams, and data privacy issues. However, there are solutions to address these concerns:
- Change Management: Implement a change management strategy to ease the transition and empower your team with new skills.
- Staggered Implementation: Implement a change management strategy to ease the transition and empower your team with new skills.
- Training: API-based AI solutions don't require any training efforts for the underwriters' team to start consuming the data, giving the advantage of starting things from day zero.
- Adherence to Data Privacy Regulations: Work with SOC 2 Type II and ISO 27001 certified organizations.
How to Implement Digital Process Automation in commercial underwriting: Ready to embrace AI-led automation?
Follow these steps to get started:
Define Processes to Automate Submission Ingestion: Identify processes that can improve Underwriters' satisfaction and enhance Quote issuance.
- Map Underwriting Workflows: Visualize current commercial underwriting processes and identify tasks that can be automated, like accessing data from submission ingestion documents like Loss Runs, ACORDS, SOVs, etc.
- Submission LOBs to Be Automated: Use your process map to decide which tasks can benefit from Gen AI automation.
- Define Goals and KPIs: Set clear goals and key performance indicators to measure the success of your automation efforts.
- Choose the Best DPA Product: Select a product that is cost-effective and integrates with your existing tech stack as per the organization's underwriting requirement.
- Track Results: Continuously measure and optimize your automated underwriting processes to ensure data quality, data consistency, and processing time align with Underwriters' goals.
Takeaway:
Switching from manual processes to Gen AI can be a game-changer for Insurers/MGAs. You'll experience accurate data quality, increased Quote Issuance, increased productivity, reduced underwriting costs, and data-driven underwriting. Don't let the cost of doing nothing hold you back; embrace Gen AI automation today.
Digital Process Automation FAQs:
1. What is digital process automation (DPA)? DPA combines people, applications, devices, and information to create an agile and digital organization. It streamlines processes, reduces manual data entry errors, and increases productivity.
2. What is an example of digital process automation? Examples include automating processes like invoicing, accounting reconciliation, sales orders, payroll, and customer onboarding.
3. What is the difference between BPM and DPA? Business Process Management (BPM) focuses on managing and optimizing all processes in an organization, while Digital Process Automation (DPA) specifically automates and improves business processes.
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