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Transform underwriting with technology

Automation, technology & scalable staffing drive growth. 

By Matt Flesch

A major shift is underway

Health plans are under increased pressure due to a rapidly changing competitive landscape and internal requirements to better manage cost while continuing to grow. Adding to the challenge, legacy underwriting processes and tools are outdated. For health plans to thrive in the future, they must leverage automation, advanced technology, and scalable staffing to drive profitable growth. Health insurance underwriting methodologies have remained largely unchanged for decades, with little variation among the models carriers use. Until now. The next generation of underwriting is here.

Organizations that continue to rely on traditional risk assessment techniques and tools are in danger of being left behind. Industry-leading insurers are adapting and innovating to achieve their growth goals and deliver optimal financial results. Increasingly, payers are incorporating:

  • New data sources
  • Deeper claims analytics powered by artificial intelligence
  • Cloud-based automation
  • Global pools of expert talent

This shift within the industry is enabling leading health plans to predict future claim expense more accurately for individuals and groups. And they can do so in an efficient manner to quickly respond to the market.

Visualize a new approach

For health plans to fully benefit from new technology and data sources, they must consider how these components fit with existing systems and methods. Adding yet another model or tool to an antiquated process will not improve efficiency.

Instead, that’s likely to negatively impact turnaround times and further burden the underwriting staff, if not integrated properly. A transformed underwriting process must encompass the entire approach.

  • Quote initiation and product selection should leverage market-facing tools and integrate with sales systems. Streamlined data intake that uses machine learning eliminates manual “scrubbing” and increases speed to market.
  • Incorporating predictive risk scores with prior experience data produces more accurate claim projections for new business.
  • For in-force business and stop-loss pricing, projections of future costs can be improved with the inclusion of new data sources and machine learning models that predict probability distributions for individual and group claims.
  • Renewing business analyzed and optimized at the portfolio level enables strategic pricing decisions that improve retention and margins.
  • Personalized proposals, delivered digitally, increase customer engagement.
  • Post-sale analytics that are integrated with the underwriting system reduce manual effort and improves reporting accuracy.

Integrate and automate each of these aspects of the underwriting process to achieve optimal results.

The changing role of the underwriter

Using artificial intelligence and enhanced data sources will also significantly elevate the role of the underwriter. Intelligent modeling that stratifies groups based on confidence levels in risk predictions allows underwriters to pinpoint groups requiring their expertise.

Decision automation, rather than underwriter intervention, can then be used for risk assessment of groups for whom confidence is high, based on the enhanced models.

This focused approach allows underwriters to spend their time on high-impact tasks and eliminates low-value work. The time savings empowers underwriters to take on a more strategic role in product development and collaborating with sales.

Don't be late

There is a significant competitive advantage to being a first mover. Underwriting arbitrage is created when one health plan predicts group risk better than their competitors. First movers take advantage of underwriting arbitrage by strategically pricing to attract and retain the most profitable business.

Health plans that have implemented these transformational changes to their underwriting approach are realizing:

  • Improved turnaround times
  • Greater efficiency
  • Reduced overhead
  • Increased group and member retention
  • Enhanced profit margins

Organizations that don’t acknowledge the shift within the industry risk falling further behind.

The path to transformation

Underwriting transformation is achievable. The data and technology to enable it is available. Breaking away from the status quo requires courage, but there are steps organizations should take now to innovate.

Invest in modern tools that incorporate comprehensive data sets and automation. Integrated systems and data sources have proven to improve accuracy and efficiency. Leading organizations have realized that investing in innovative underwriting tools leads to increased margins and membership growth.

Rethink risk assessment methods and adapt processes to include new analytics.  Advances in technology have enabled the use of artificial intelligence and machine learning to uncover insights about member and group risk that previous methods could not.  Market leaders will leverage these innovations to attract and retain business at the optimal rates.

Enable underwriters to perform high-value work by automating or outsourcing routine tasks. For too long, underwriters have been asked to perform administrative tasks as part of the rating process for lack of any other options.  Automated workflows, system-driven data manipulation and outsourced underwriting staff can ease this burden and will allow experienced underwriters to focus on strategic decisions for the most valuable and complex cases.

Leaders who are willing to make these changes a high priority will win in the future. Late movers will lose the opportunities to acquire and retain the best business and will see a decline in their competitive position.

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