Automated underwriting systems are commonly used in the insurance and financial industries because they enable companies to assess risk instantly and make accurate decisions about which applications to approve.
Of course, using automated systems shouldn’t come as a surprise given the sheer volume of applications that major companies in these industries receive on a daily basis; manually processing them can be a time-consuming and laborious task. This is where business rules engines come into play, as they can help to optimize the automated underwriting process for both insurance companies and financial institutions.
What Are Automated Underwriting Systems?
Automated underwriting systems can be referred to by many terms, including algorithmic underwriting, and digital underwriting. Regardless of the name used, they all refer to the use of technology to automate the underwriting process.
The Importance of Rules Engines
A business rules engine is a software tool that allows organizations to create and build and manage rules and logic that automate decision-making processes. Business rules are powerful conditional “if-then” statements that outline under which conditions an application should be approved. When underwriting software is connected to a business rules engine, non-technical users can make changes to underwriting criteria without having to code or wait for help from It, which can take months.
An underwriting platform with a rules engine can become a more robust and intelligent system that can process a higher volume of applications while still maintaining accuracy.
Therefore, the importance of business rules in automated underwriting lies in their ability to provide consistency, reduce errors, and improve efficiency. When a company implements business rules, it ensures that all applications are assessed in the same way, which reduces the risk of inconsistencies and errors. Additionally, business rules can be used to automate repetitive tasks, which can free up underwriters to focus on more complex cases.
As a result, major insurance carriers deploy business rules engines to automate their underwriting processes and improve efficiency.
Manual Underwriting Issues
Before implementing the business rules engine, underwriting in many insurance companies was largely manual, with human underwriters having to manually assess each application.
This was a time-consuming process that resulted in a high number of errors and inconsistencies.
By deploying business rules engines, insurers were able to automate many of the repetitive tasks that underwriters had to perform, such as data entry and application validation. This freed up underwriters to focus on more complex cases, which resulted in a higher level of accuracy and consistency. Given the flexible and user-friendly nature of a business rules engine, insurers can build more intelligent underwriting systems that assess applications based on a wide range of factors, such as demographics, health status, and occupation.
Business rules engines can also help insurance companies and financial institutions meet their key performance indicators (KPIs). KPIs are measurable goals that companies set to track their progress and ensure that they are meeting their objectives.
For example, one common KPI in the financial industry is the percentage of applications that are approved. By using a business rules engine to automate the underwriting process, financial institutions can increase the percentage of applications that are approved, which can lead to increased revenue and profitability.
In conclusion, a business rules engine can greatly optimize the automated underwriting process for both insurance companies and financial institutions. By automating repetitive tasks, reducing errors and inconsistencies, and improving efficiency, a business rules engine can help companies to process a higher volume of applications while still maintaining accuracy. Additionally, by helping companies to meet their KPIs, a business rules engine can provide a significant boost to the bottom line.