Episode 036: The Underwriter’s Compass for Navigating “Under the sea” of Information


Underwriters know that, before the actual underwriting begins, they must first build a file out of disparate pieces of information. Navigating this sea of data from here, there and everywhere can haphazardly redirect the underwriter’s sails into unnecessary roundabouts, prolonging decisions and causing waves in their “pool of risk.”
 
Join us for a conversation of experience and perspective as we chat with our re-occurring guest Jeff Hiegert, Insurance Adviser at Hyland, and Toni Smith from ImageSoft, on addressing the underwriter’s biggest concerns, including how to efficiently put necessary information in front of underwriters so they can sail their organizations toward the best decisions.

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Kevin Ledgister: Welcome to the Paperless Productivity podcast where we have experts give you the insights, knowhow, and resources to help you transform your workplace from paper to digital and making your work life better at the same time.

Thanks for joining us. My name is Kevin Ledgister, your host, and today we’re talking about solving underwriting challenges for insurance carriers and how content management technology has helped them to become more efficient and be able to function away from the office. With us today is Jeff Hiegert from Hyland Software. He’s a returning guest and he’s been with us several times before. Jeff, we’re glad to have you back here.

Jeff Hiegert:: Thank you, Kevin.
Kevin: We also have Toni Smith… Thanks, Jeff. We also have Toni Smith from ImageSoft. Hi, Toni.
Toni Smith: Hi, Kevin.
Kevin: Both of our guests today have worked in the insurance industry, but they now have both gone to the dark side working with technology firms that partner with insurance companies of all stripes. Jeff, we’ll just kick off the discussion with you. What’s the biggest things that underwriters are concerned about and tasked with as part of their jobs?
Jeff: Thanks Kevin. Again, it’s good to be back. I don’t know if I would qualify it as the dark side, but we’ll just call it the other side. But some of my comments are going to try to be applicable to all insurance lines of business. There’s going to be some nuances when we’re talking about life insurance versus P&C versus work comp or health, or even within some of those primary lines of business. There’s nuances with certain companies, what products they go to market with. While my statements may not be applicable to every insurance carrier out there, I think most of them are probably following along with some of these challenges that I’ll bring out.

With underwriting, really, the underwriting department or the underwriting function is somewhat the gatekeeper, if you will, for a typical insurance carrier. An insurance carrier is going to have a pool of customers, a pool of risk, if you will, and the underwriter, along with the actuarial department and the terms and conditions of the policies and the rating structure and all of those things, function as a gatekeeper to protect the rating pool. Meaning a pool of insureds that is filled with high risk individuals or high risk policies is not going to perform well. They need to make sure that we balance that pool with acceptable risks, good risks along with those that might not be as good. It’s really critical, from an insurance standpoint, that the underwriting process is not only efficient but very effective as well in terms of applying those terms and conditions and the rules around the specific policies that they’re underwriting.

It’s a really critical point in the journey of an insurance policy, and really, outside of contact with an agent or some other distribution channel, it’s the first point where a consumer actually starts to engage with their carrier. Not only is it important from a standpoint of protecting a carrier as risk pool, but it’s also important in terms of providing a good quality, an effective and efficient interaction with the consumer base that’s setting the tone, if you will, for that relationship going forward.

Kevin: It sounds like to me that getting the right information in front of the underwriter is critically important. Not only are they working with different calculation tables and things like that in terms of how they look at risk, but they also need to take a look at, well, how much risk are they carrying for a particular individual, or company or organization or whatever it is with respect to how much risk are they undertaking? How many policies do they have in force, and what are they all looking at?

I know, Jeff and Toni, you guys both have worked with insurance companies and gone deep into that process and taking a look at that, what are some things that you guys have done, or some things that you guys have seen, that really helps to get the right information in front of these underwriters so that they can make these good decisions for their firms?

Toni: Sure.
Jeff: That’s a good question. Go ahead, Toni.
Toni: I was just going to take the life side on that question, Jeff, and say that a lot of life companies have gone through a lot of line of business applications, so it’s very critical for them to understand other life policies or other relationships that have life policies when they’re underwriting a policy that’s coming through at the current time. We’ve always found that because OnBase has such an open architecture and because it’s so good at bringing disparate systems together, that we’re able to get those calls and bring all of the policies together into one view for the underwriters so that they’re able to see past, present, and then therefore try to protect the future. That’s just one approach for the life side. Jeff, I think you were going to say something?
Jeff: Actually, in a previous life I was a P&C underwriter for homeowners. I underwrote homeowners and personal lines, auto policies for an insurance carrier. Much like the same as with life insurance or health insurance or any other type of insurance, data or information is really the currency, if you will, so the more you have of it, the better decisions you’re going to be able to make. From a P&C standpoint, it’s really no different. Most of the information, or some of the information, that they get for the underwriting processes are going to come either on the application or through some standard form submissions for personal lines auto. You’re talking about an MVR and things like that that would give the underwriter a picture of the risk.

But then there’s also information that’s available from third party sources. Extending on Toni’s comments on life insurance, IntelliScript or MIB, places where you could go and get information and medical history regarding an applicant’s prescription history or medical history. Much like in the way of an MVR, you can get a history of person’s traffic citations or accidents. You can run what’s called a CLUE Report, a commercial loss underwriting exchange, that shares historical information about people and vehicles that have been involved in an accident. Really, the challenge for an underwriter is how can I get all of that information related to that specific risk so that I can make an informed and educated decision on whether or not this is a risk we want to accept into our risk pool?

Technology platforms like Hyland and content services platforms, really the value that they bring is the ability to collect that information, remove it off of paper-based or static types of formats, go to external places and pull in information from those other third party vendors. As Toni said, present that 360 view or complete view of that risk as it relates to the policy that they’re applying for. It just gives the underwriter a safety net, so to say, to make sure that they’re making a completely informed decision. Again, trying to protect the risk pool and not letting poor risks into their environment.

Toni: Really, by automating as much of this process that we’ve talked about today, as far as bringing that data together, going out and grabbing that data, bringing it into a view that the underwriter can look at, lets the underwriter do underwriting instead of clerical work. It allows them to just really do their jobs so that all day long they’re actually underwriting. They’re not trying to find things. They’re not going out to websites to pull it in. They’re not looking at old systems to try to determine, but they’re actually doing the underwriting themselves, and able to do that much quicker if we’ve automated bringing all that data. Or I believe as Jeff said, that’s really the critical piece. That’s the cash right there.
Jeff: Advances that have been made in digital forms technology and dynamic forms where what used to be a paper-based submission can now be a digital dynamic form where the consumer is basically taking over the responsibility of doing the data entry. As the consumer is providing information through these dynamic digital forms, we can automatically go down a different line of questioning based on how the consumer is providing information. We can tailor the product offerings. All of those things that we can do digitally, instead of relying on a consumer filling out a piece of paper and then trying to leverage the data after it’s scanned in or after it’s captured in your office, just gives the underwriter that much more flexibility and understanding of the risk, and can even go so far as to automate some of the surface level underwriting decisions.

For example, if someone’s filling out an application in a digital dynamic form online, and as they’re answering questions, if they provide data or input that we know excludes them from eligibility based on geography or career or age or whatever the case may be, we can give feedback right there to the consumer that says the product you’re applying for, you’re not eligible for but here’s another option that you can continue to apply for. Rather than having the customer fill that out, send it in, and then waiting several days or longer for the carrier to respond back and say, “Oh, I’m sorry we got your application, but you don’t qualify”. From a customer service standpoint, there’s tremendous strides that can be made in that way, but then at the same time, that data is almost being scrubbed, if you will, as it’s being submitted into the carrier, which obviously makes the underwriter’s job much, much easier.

Toni: Jeff, the other side of that is, we can do what I call straight through processing. You talked about maybe it excludes them, but there may be some insurance, especially on the life side and also on the P&C side, where we know because it fits a certain criteria, we’re going to run that, we’re going to go with it. We can actually do that without any interference with the underwriter and let the underwriter do the more complicated cases in that way.
Jeff: Absolutely. There’s obviously a cost associated with underwriting a policy. There’s the cost of having that experienced individual take the time to review that information, there’s costs associated with the technologies and whatever that’s involved. You’re right. Companies are looking at those situations and some of the lower face value policies or a more traditional personal lines auto or those types of things, it’s in their better interest to say, “Hey, if it’s under this face value and all of these questions are, no, it’s easier for us or it’s better for us to go ahead and accept the risk, get the policy issued, and maybe run the risk of having a poor risk enter the pool than it is just to spend the physical money and expenses of fully underwriting a policy”.

You’re right. There’s opportunities there to use artificial intelligence or just even simple business logic that can help pre-underwrite policies and do automated issue as you described.

Kevin: One of the latest trends that I’ve seen starting to pop up in the insurance world is robotic process automation, which, for our listeners is not an actual robot that’s actually sitting there pushing keys on a keyboard, but really is a software that essentially records how a person actually interacts with the system or with the external system, and then the software is able to essentially replicate those tasks. So that repetitive tasks that are being done on day in day out, whether it’s key entry of data into one system, or whether it’s entering information into external systems to bring data back that automatically pre-filled fields, that’s where some of these robotic process automation tasks can really help make it much more efficient. Can you guys share with our listeners, any experience that you’ve had with that, or in terms of where you’re seeing some of these applications popping up in the underwriting world?
Jeff: Sure. Personally, I’ve always had a little concerned about the fact that we call it robotic process automation or the industry term is that’s what it’s used. Because in many cases, we’re not able to automate the full process. As you alluded to, we can pick out tasks and activities that occur during the process, that are repetitive, that we can use technology to automate. The example you gave is if every time an application comes in, someone has to go out to an external website and enter in a person’s social security number and download a report of some kind. Take an MVR for example, if I go out to any of the state Department of Motor Vehicles, if I want to run an MVR on a particular applicant, I go out to that website or I enter in a driver’s license number and it gives me an MVR report that I download and make part of the underwriting file.

Well, those are tasks that an RPA, or a robotic agent, can be configured to do. If all that’s required is I can get the driver’s license number from data off of the information that was submitted on the application, and I can then mirror the keystrokes that a human person would do to go out to these Department of Motor Vehicles to download a report, and I can just replicate that through a “robot”. It’s opportunities like that where you can look at the end to end process. I gave a P&C example, Toni may be able to give a life one, or I can, but those are opportunities where we may not be able to fully automate the entire process. We can certainly look for tasks and activities that occur within that process and automate those.

Toni made a good point about putting the underwriter in position to where they’re able to do the underwriting. They’re not having to go out and “I’m just collecting data, or I have to go and build out the file with all these other pieces of information on input before I can actually do the underwriting.” We can eliminate some of the clerical tasks, if you will, around getting a file ready to be underwritten, then everybody’s going to be better off for that.

Toni: I saw one carrier that actually, they had a really great rules engine but they didn’t have a really good way to get the data into the rules engine. It was disparate from their normal system and they wanted to use different rules for different products, and they just didn’t have a way to get that in. They used robotics, basically, to take information from that application, feed that data that they got there, feed it with actually robotics instead of having somebody do that data entry, and then get a value back from the decision, I guess, instead of a value, it was a value, but a decision back from the rules engine to make that. I’ve seen that there.

I’ve seen it, as Jeff said, app third party system’s really big to get, or to enter information into. As well, if you’re seeding off insurance, and you need to get some forms from the person that you seed to, some kind of answer, you may go out to their website and use robotics there as well. I think we’re just touching the tip of it to be honest with you. I believe we’re going to see this explode over the next few years, and we’ll start with small things and then see some larger things. I don’t know, Jeff, if that’s your prediction, but I think we just are barely scratching the surface.

Jeff: I agree. I think more and more companies are beginning to adopt the technology, and they’re doing so in these small little task-based types of things. As they’re getting used to the technology and what it can do for them, they’re starting to expand their use cases. I agree. We’re at the beginning stages of it. Obviously there are some carriers that are ahead of the game, maybe have been doing things for several years now, and have maybe adopted RPA and AI and robotics throughout their organization in a more broad capacity, but I think predominantly, we are at the very beginning of that technology beginning to take over. I think it’s just going to get more and more use as companies get familiar with it and start to look at their processes in more detail. Wherever it is that they’re moving data from one system to another, is right for opportunity for them to use RPA to do that instead of human capital.
Toni: What about, Jeff-
Kevin: It can certainly by-
Toni: Sorry. Jeff, have you seen any in the agency world where the agency… You know how often the agency will have their own software, especially the larger ones, and they write with several carriers and just go out there and shop insurance for their clients. Have you seen robotics used at all for that shopping where they’re doing the entry into the carriers using robotics?
Jeff: I don’t know that I could say specifically if they’re using RPA or a robotic process technology, but the use case is very much alive and well. There are vendors that are solely dedicated to the idea of helping agents and brokers capture a client’s data, and application data, one time and then repurposing that data to submit to multiple carriers. That’s the use case right there, is if I can collect data once and use a robot or technology to then take that data and reenter it in two, three, five other different, whether it’s a website, a portal or another source, that I can go ahead and submit applications for an individual to multiple carriers, then that’s going to make it a lot easier than having the agent do that five times.
Toni: I think so too.
Kevin: I actually had experience with that. In a previous life I was working with a RPA solution that actually logged into an online site that was basically one of these old mainframe type sites where it logged in, went through 10 different screens to actually grab data from each one of the screens, specific data, and return that information all back to pre-fill a form. It did that in a half a second, which is actually quite amazing considering that would usually take about five minutes for a keyer to do that and be able to speed that process up dramatically. Definitely improved some of the throughput with processing, so I do think that we’re going to be seeing a lot more of this because it definitely is an area where insurance companies…

Especially when you think about two companies offering a life policy or an automobile policy, and if you’re insuring the same person for about the same price, what is your profit to come in, well part of your profit’s going to be based on how efficient can you operate? How can you lower the cost of your operation so that more and more of your rep premium goes to which profit as opposed to having to pay things out or going to having to pay for people to do things that machines can certainly do? One question-

Jeff: If you think about that, Kevin, sorry, I just wanted to go back and make a point on that. Is that we talked about independent agents and brokers taking advantage of things like RPA to speed up the process of submitting applications to multiple carriers. That activity right there is what’s making it so critical for the underwriting part of that carrier to get that information and get their underwriting process as turned around and as efficient as possible. It’s kind of a catch 22, the more easy it is for an agent or a broker to submit applications to multiple carriers, the more important it is for each of those carriers to be able to expedite those applications as quickly as they can.

Just what typically might happen is a broker might submit an application for life insurance to three different carriers, they’re roughly the same premium, they’re roughly the same coverage, especially on something that might be as pretty straight forward as a term policy, they’re just waiting for whoever sends back the policy first. Whoever gets it done in the back in the agent’s hand wins that business-

Toni: Whoever’s easiest to do business with, right?
Jeff: Exactly. If the more efficient technology is making the agents and brokers, it’s pushing the envelope and forcing carriers to become more efficient on their end as well in order to win that business. It’s a catch 22, but fortunately, both of them can take advantage of the same technology, it’s just a matter of who can keep up with who.
Kevin: Since you brought that up about talking with agents and individuals submitting policies and getting that return first, in the underwriting process, it’s typical, or it’s not unusual, the underwriter might require more information from either the agent or from the applicant themselves. How has technology, or where are some things that you guys have seen that it’s really helped to facilitate that communication, the submission and receipt of documents and that going back and forth? Which, an underwriter who could be working with a high number of policies, that could be something that’d be tricky to follow up with and keep track of, especially in our world today where a lot of people are having to work remote, so receiving a paper document might not be the most conducive way to conduct business. What are some things that you guys have seen that has really helped to smooth that process out?
Jeff: I think what you’re describing there is basically how are they managing the not get order and get order challenge. Anytime there’s a submission of an application, there’s a likelihood or a chance that that application is not going to be in get order. Meaning that a field was not completed or a section of the application was not completed or there’s a missing form that was supposed to come in or something like that. Something is missing or not present that makes that application not in get order. They’re unable to move forward in the underwriting process. The challenge is one, what do they do when that occurs? How can they quickly get that application in get order by requesting and receiving the information that’s required. Or B, how can they ensure that more applications are in get order when they’re submitted?

This is goes back to what we talked about earlier and some of those dynamic digital forms. Using a dynamic digital form, it can almost assuredly guarantee you 100% of applications are in get order, because you build in rules that dictate this field has to have a value in it. It has to have a value that’s numeric. It has to be this, that and the other thing. You can build logic in there to ensure that what’s being submitted is in oodt order. If they’re in a particular state applying for a particular coverage, you can feed the consumer, “You’re also going to need to submit this form and this has to come with it.” That is one thing that’s helping eliminate the problems of not and good order.

On the other end, if things do come in and paper or traditional distribution channels and they are not in good order, carriers are taking advantage of customer communication management platforms, or document generation platforms, that can automatically generate outbound correspondence to either the agent or the applicant indicating, “Hey, we’ve got your application, unfortunately these sections or this form or this data point was missing,” and then give them opportunities to submit that. What we’re seeing a lot of carriers do instead of traditional email or paper mail, is use an enterprise file sync and share. Think Dropbox and things like that. Hyland’s got a product that’s fully integrated into OnBase called ShareBase, and it’s very secure way for carriers to share content externally with a consumer or an agent or someone who is not going to have access to their technical environment.

When there are missing information, if applications are not in get order or the example you gave, if I have employees that used to be in the home office that are now being forced to work remote, how do I get them information to help in the underwriting process without sending it through email? If the applications are going to contain private information, personal information, things like that, you don’t want to be communicating as an attachment in an email. Technology like ShareBase enables carriers to share that content in a secure fashion. Basically, you’d be able to share that content with either a consumer, an agent, an internal resource that happens to be remote or not in the home office.

Toni: I would echo the ShareBase piece and how that’s really solved a problem, especially for people who don’t have some portal set up for their clients and their agents. It’s been a great way to exchange information securely and then get information back, have it put into workflow and not worry about it while it’s out collecting. The beautiful part of that is that with the product where it’s very easy for us to set timers, and to escalate, and to send something out. If we don’t get a response, we set a timer, maybe we send it out again, maybe we set that third timer, and maybe that goes a queue for someone to actually call them, that’s not the underwriter, but to remind them. And then when it does come back, it just pops in the queue to be worked by the underwriters themselves. They don’t have to waste time with all that follow up, ShareBase has been a great tool for that.
Kevin: I want to underscore that too, because when you have a team of underwriters and you’ve got all kinds of emails that are coming in or mail that’s coming in that’s being scanned in, to match all that up with the correct application can sometimes be a huge challenge. That’s just a huge time saver right there, in and of itself, that even automate the response of the information coming back to tie it together with the information, and then present it to the underwriter so the underwriter’s not having to go through and check everything on a daily basis or where’s this at? Where’s that at? We’re presenting him the work that’s ready to be looked at and automatically escalating this stuff that’s falling behind, which saves a lot of mental cycles and allows an underwriter to be a lot more efficient.

Just one final question before we sign off here, and this has been a very, very, very interesting and very powerful discussion we’re having here in terms of how can we make a difference in the life of an underwriter. I know with our current crisis, and we touched on this a little bit earlier in terms of, how has it been for underwriters during this process when they’ve had to go from maybe working in the office five days a week and commuting, to working at home? Have you guys seen a big change in that or is this something that insurance companies have been able to make a smooth transition for their underwriters to work remotely?

Is there anything else they need to consider to think about this, and maybe even not for what’s happening today, because everybody’s scrambling and they’re coming up with work arounds, but maybe there’s some things for the future that they should consider so that when we get back to this type of position it’s a much smoother transition for that. Toni and Jeff, you guys have anything to share along those lines in terms of, what can somebody do today, or think about for tomorrow? That would be great.

Toni: My largest carrier that we look at really has been working from home for quite some time. I don’t believe the underwriting was where they scrambled as much. I’m sure there are other carriers though that scrambled a lot more. It’s dependent on where they were, but I think for a long time insurance companies have tried to not limit geographic location to get talent into their doors, so I think we approached this hurdle maybe several years before now. This might not been as big of a problem in the underwriting space or maybe insurance as a whole, but for sure in the insurance, I would say. Jeff, I don’t know what your experience has been?
Jeff: I would agree with that. I think the underwriting role specifically, I think maybe apart from some other roles in a typical insurance office, lend themselves to remote work maybe more so than others. So I agree. From what I’ve seen, most carriers that we’ve interacted with, some portion, if not all, of their underwriting staff is remote. Mainly, the point you made is that there’s a strain and a challenge of talent acquisition in the insurance industry, so when you find an underwriter who just happens to live in another city, that is a qualified candidate for what you need, you don’t want to limit your ability to leverage that resource just because they live in a different city. I think Toni’s right, in that, from an underwriting perspective, I don’t know this particular situation is really impacting them all that greatly.

But I would say that maybe the challenge is going to be that that field underwriter, or that remote underwriter, no longer has an 800 number to call to get access to home office resources. Those home office resources that used to all be in the same building are now scattered around in their home. Maybe the challenge might be on how they’re being able to interact with their contacts for those folks that they’re normally interacting with, but I’m guessing a lot of that is still being managed through phone calls and email in the same way that it was done before.

But the bottom line is, there’s always going to be some sort of crisis that’s going to disrupt our lives and disrupt the insurance industry and force them to have to do things a little bit differently. Whether that’s a hurricane or some other natural disaster or a financial crisis or what we’re dealing with now. The insurance industry has been around forever, and it will continue to be around forever. It’s a necessary evil, some people would describe it, but it’s a necessary business and a necessary thing to have in place. In particular for times like this.

While I don’t think this is really impacting an underwriter as much as maybe some other roles at an insurance office, I think there’s always opportunities to use this as just a reminder that leveraging content services platform that can enable the remote workforce, and digitizing processes and not relying on physical paper to communicate data, and not relying on brick and mortar office buildings. I think it’s a reminder for carriers of all types that say, “Hey, we probably need to revisit our digital transformation strategy,” and take advantage of some of the technologies and capabilities that companies like Hyland offer.

Toni: That’s a great reminder, Jeff.
Kevin: I think your point is very well taken. We did a podcast, recorded one last week with our folks internally here at ImageSoft, and how we’ve been able to make a smooth transition from the majority of our office employees being in an office to basically being 100% remote and still being able to continue on with our essential business functions. Not having to miss a beat and really only have to make a very, very few adjustments. One of the things that they said that’s made this possible is that they had a philosophy, that started several years ago, that any new technology platform or any new solution that the implement, it needs to support the remote worker. If required, it needs to have a mobile component. We’re going to start with those areas first, not last. Because of that, we were able to make that smooth transition.

I think in the insurance space, while the insurance companies have done that from a underwriting perspective, you may be right, Jeff, in telling me that there may be other roles in the insurance cog, if you can say, the whole operation, where that approach maybe needs to be taken as well. It might be claims, it might be some other areas that they need to think of in terms of how do we make this work in a remote world? Because you’re right, something else is going to come up, whether it’s talent acquisition, or whether it’s the next crisis that’s going to come up, that our office doors are shutting, the lights go off, but we still need to function, we still need to stay in business, and we still need to service our customers.

Great points. Jeff, Toni, I want to thank you both for your conversation today. I thought this was great. I’d love to have you guys both back on again for some other subjects. I don’t know, but you guys had so much rich stuff to share, so thank you both for joining us today.

Toni: Thank you. It was my privilege, Kevin.
Jeff: You’re welcome. I appreciate the time- … I’m happy to help out anytime.
Kevin: Thanks again for joining us on this podcast. If you haven’t already done so, be sure to subscribe to Paperless Productivity, where we tackle some of the biggest paper-based pain points facing organizations today. We’ll see you next time.

For additional information, please visit https://www.imagesoftinc.com/insurance.html

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