In the insurance industry, underwriting is the process of evaluating risk and determining the cost of coverage for a potential insured party. It’s one of the most critical steps in getting an insurance policy written, but it can be time-consuming and challenging for even experienced agents. Underwriting software is designed to streamline this process by allowing users to create profiles of individual risks and instantly see whether they meet predetermined criteria. This article will explain what underwriting software is, how it works, and how it helps insurance agents.
What is Underwriting Software?
Underwriting software is a risk management and insurance software that allows insurance agents and brokers to perform underwriting decisions and generate policies quickly and efficiently. Underwriting software lets insurance agents see which risks would not qualify for coverage. It can include coverage analysis, binding coverage, policy and contract generation, and premium calculation. Underwriting software is designed to help insurance agents reduce the time and effort required to assess risk and generate policies. It integrates and consolidates processes, data, and information between the risk management, policy administration, and sales systems. Underwriting software enables insurance agents to perform underwriting decisions, generate policies, and manage risk more quickly and efficiently.
How Does Underwriting Software Work?
When an insurance agent is trying to determine whether or not a customer would qualify for a particular policy, they will typically review several factors, including the customer’s age, health, driving record, and home/auto situation. The more risk factors a customer has, the more expensive their policy will be. Underwriting software helps agents reduce the time it takes to review these factors by allowing them to create a digital customer profile. The customer’s information will be entered into the software and matched to the relevant factors. From there, the software will instantly estimate the customer’s premium.
Why is Underwriting Software Important for Insurance Agents?
Underwriting software allows agents to perform underwriting much more quickly and efficiently. Agents can review a customer’s information in one place, then instantly see whether or not the customer qualifies for coverage. Additionally, underwriting software provides agents with insight into the risk that the customer is taking on. If the customer is willing to accept a higher premium in exchange for lower risk factors, that choice can be reflected in the customer’s information. If the customer’s risk factors are high and they want to keep the premium as low as possible, the underwriting software will adjust those numbers accordingly.
Types of Underwriting Software
There are several different types of underwriting software, each of which performs a different function during the underwriting process.
- Coverage Analysis
Coverage analysis is the process of determining which risks are appropriate for coverage and which ones aren’t. It’s the first step in the underwriting process and the first thing underwriting software will do. Coverage analysis will help you determine if the risk meets the company’s eligibility requirements and generate a recommendation for coverage.
- Policy and Contract Generation
Policy and contract generation allows the underwriting software to generate the documents necessary for the customer to sign automatically. These include the contract, a risk assessment, and an explanation of coverage.
- Premium Calculation
Premium calculation is the process by which the underwriting software determines the premium amount for potential risk. Premium computation matches the risk profile to the company policy to arrive at a dollar value.
Which Type of Underwriting Software is Right for You?
Now that you know what underwriting software is and how it works, it’s time to determine which type is best for your business. When you’re choosing underwriting software for your business, there are three things you need to keep in mind:
- What does your business currently look like?
- What are the challenges you have with your current system?
- What do you hope to accomplish with the new system?
Once you have a good idea of where you are, where you want to be, and what underwriting software can do for you, you’ll be able to find the best underwriting software for your insurance agency.
Conclusion
Underwriting software is a risk management and insurance software that allows insurance agents to determine which risks are appropriate for coverage. The software performs underwriting decisions, generates policies, and manages risk more quickly and efficiently.
