The reason that Insurance companies are interested in Decision Management technologies is very clear. It is no surprise that it is one of the top vertical that adopted them. Let me share my experience.
Faster decisions
It started with insurance applications turn-around time. Do you remember the days when it was common practice to wait for 45 days for a response? It was over a decade ago, and it really allowed BRM technology to take off. With automated decision services, the underwriting process could be executed in a matter of days (if documentation had to be collected) down to a brief instant.
Making faster decision had a definite impact on the bottom-line: the faster you accept a new insurance application, the more likely you would get the business — assuming the premium is reasonable.
Freeing resources
Automating decisions is analogous to reducing the workload for your resources. When underwriters have less applications to review manually, Insurance companies are presented with several options:
- Reduce their workforce – certainly not my favorite…
- Augment their capacity and expand their business
- Allocate their personnel to value-added tasks
Having more time on their hands, underwriters can spend quality time with the high risk / high reward applicants; elaborate new competitive products, or experiment with different strategies. All of these having a positive impact on the competitiveness of the company.
Anticipating
While business policies are captured and automated, it becomes much easier to anticipate how they will perform.
Throw some historical data at it, and the simulation can report on the decisions they would have made, and how they aggregate. Insurance companies can compare their automation rate: a single careless change in a business rule could flood the underwriting department with extra volume of applications to review manually. A simple simulation would detect that before it hits Production.
Another aspect that proved invaluable in the past is the ability to connect the dots across departments. One example that comes to mind is this Insurance company that was marketing to high risk / high value population, only to have risk-adverse underwriters decline them when they applied. Having visibility into the decision process, and appropriate dashboards, allows these Insurance companies to better apprehend end-to-end decisions, and possibly to conduct coordinated experimentations too.
Learn more about Decision management and Sparkling Logic’s SMARTS™ Data-Powered Decision Manager
