AI-Powered Insurance Platforms Boost Underwriting Efficiency

A 2019 article focusing on insurance underwriting by McKinsey stated, “Based on our observations, anywhere from 30 to 40 percent of underwriting’s time is spent on administrative tasks, such as rekeying data or manually executing analyses.”

In 2024, a P&C insurer study conducted by Capgemini suggested that 41% of the underwriters’ time is spent on “administrative and operational activities, constraining their capacity and triggering value chain challenges in pricing and broker/customer experience.”

Improving underwriter efficiency has always been a key driving force behind selecting an insurance platform. However, merely adopting a modern insurance platform is insufficient to address some of the current inefficiencies. To truly enhance underwriting efficiency, insurers now have the opportunity to select an insurance platform with built-in advanced AI-based automation and process optimization solutions. Furthermore, selecting a platform equipped with AI capabilities and partnering with a solution provider that is actively investing in AI technologies will not only meet current underwriting demands but also drive future productivity and innovation requirements.

With built-in AI-driven solutions, insurers can streamline operations, reduce manual workloads, and enhance overall efficiency, positioning themselves for long-term success in a rapidly evolving market. A modern platform working in cohesion with its own AI solution is the only way to achieve maximum efficiency and success.

Key areas where AI can bring substantial benefits include:

• Improving User Experience and Automation: AI-powered platforms can streamline and automate repetitive tasks, such as data entry and analysis, thereby reducing the administrative burden on underwriters. For example, Cogitate’s DigitalEdge platform has UW Assist, powered by CogitateLabs, which includes data ingestion capabilities. The AI reviews the input submission forms, automatically identifies the inputs for the submission through its powerful LLM models, and inserts data automatically into the application. This drastically reduces the manual administrative work for the underwriters and improves their user experience.
• Reducing Premium Leakage and Adverse Selection: AI can play a crucial role in minimizing premium leakage by identifying discrepancies and ensuring that premiums accurately reflect the risk associated with each policy. Moreover, AI-driven analytics can detect patterns indicative of adverse selection, where higher-risk individuals might be disproportionately represented. By addressing these issues, insurers can better align premiums with actual risk profiles and improve the financial stability of their portfolios.
• Prioritizing Work: AI can assist underwriters in prioritizing their workload by analyzing and sorting tasks based on urgency and impact. Intelligent systems can assess cases that require immediate attention and those that can be deferred, optimizing the allocation of resources and improving workflow efficiency. This prioritization ensures that critical tasks are addressed promptly, leading to better risk management and decision-making.
• Identifying Demands: Attorney demand letters are one of the biggest challenges facing the insurance industry. Any bad faith claim can have a significant impact, with settlements running into millions of dollars. Insurance companies have to deploy the manual process of reviewing thousands of documents daily to identify demand letters from attorneys. This is a time-consuming and error-prone process. With solutions like Cogitate’s DemandAssist, an AI/ML-based product, significant operational efficiency with an error-free process can be achieved.

Conclusion

AI-based tools are becoming a part of the work process, and proper adoption is key for an organization’s success and sustainability. To effectively leverage innovative tools, particularly AI-assisted solutions, it is essential to first build trust within your team. This involves gradually introducing these tools to address specific issues, consistently using and testing them, and measuring the improvements they bring. By demonstrating tangible benefits and success, you foster confidence in the technology and cultivate advocates for innovation within your organization.

Equally important is finding the right partner, like Cogitate, to support your transformation journey. Selecting the right solution provider who not only offers advanced tools as part of their insurance platform but also invests in ongoing innovation and support ensures that you have a reliable ally in navigating the complexities of modern insurance technology needs. This partnership is crucial for maximizing the potential of AI solutions and achieving long-term success in underwriting and beyond. Learn more about Cogitate at cogitate.us.