This is the second in a series of blog posts looking at how U.S. commercial insurance professionals are responding to current and emerging market trends.
Automation can help commercial insurers drive efficiency. That’s especially true within small commercial insurance, where the greater volume of transactions can create labor-intensive busywork for underwriters and increased chances of incomplete or error-ridden applications—all to the detriment of the customer experience. In other words, the absence of automation can be costly and potentially undermine an insurer’s ability to achieve a competitive advantage.
As mentioned in a previous blog post, carriers in small commercial lines have many opportunities to create meaningful change in their organizations. However, it can be challenging for them to know where to start. LexisNexis® Risk Solutions conducted a third-party study of over 400 commercial insurance professionals to better understand how small commercial carriers are responding to the factors that are most impactful to their business. Let’s take a look at one of the key factors we examined: Automation.
Automation lags behind desired levels
The majority of respondents (83%) recognize automation as an efficiency driver and want to increase automation levels.
However, there is a significant gap between how much they value automation and the actions they’ve taken to achieve it overall. Only about half of carriers have automated underwriting processes. In addition, compared to a 2016 LexisNexis study on automation, the level of automation hasn’t improved over the past couple of years.
Pain point: The degree of manual work in underwriting
Confirming the need for automation in small commercial lines, respondents cited the degree of manual work in underwriting as their biggest pain point. In addition, 89% of carriers report having to manually re-evaluate insurance applications. Underwriting managers are most likely to discover inaccurate information later in the underwriting process, which requires rework. Notably, 66% of them list post-underwriting follow-up as their primary pain point.
Click here to access the full report to get additional the insights that can help your organization make meaningful progress.
Turn the automation gap into an opportunity
Automation drives efficiency and accuracy. If carriers can expand automation capabilities to include advanced use of predictive modeling and automated quoting through prefilled data on the business, they can get closer to their efficiency goals―which helps reduce errors, alleviate unnecessary rework on policies, improve turnaround times and advance their competitive advantage.