In manual underwriting:
After a life insurance application is filled out by an individual, it goes into an electronic database. The underwriter reviews this application and analyses the risk the individual presents. If necessary, the underwriter may request additional information as well as the attending physician summary. These documents need to be reviewed by the underwriter for risk assessment.
The underwriter may also conduct a face to face or telephonic interview with the applicant if the case involves complexities. If the assessment of risk is difficult, an underwriter may forward the case to a senior underwriting professional. After analysis of risk, the determination of the terms and conditions of the policy is done. The judgment and experience of the underwriter form the basis of the decision.
While the manual process has been in use for years, it is incapable of catering to the high demands of the modern times. The dependence on the submission and analysis of paper documents means a waste of time and energy. Moreover, the reliance of the process on the judgment and experience of the underwriter makes it prone to errors and inconsistencies, things an insurance business cannot allow if it wants to succeed.
In automated underwriting:
The solutions available in this category try to rectify the problems that manual underwriting presents with the use of automation tools at different points in insurance processing. While some solutions aim to automate the entire insurance process, some aim to automate parts of it. It is better to choose the one that suits your business needs as well as the one that you can integrate with your present business processes.
The point of sale underwriting solutions place tools of automating the insurance process at the point of sale making it possible to automate the entire process. The applicant fills out the application form using a straightforward and easy-to-use interface; automated risk analysis determines the risks associated with an applicant and generates the terms and conditions of the policy. Underwriters are involved only when there is a complexity.
In tele-underwriting systems, only parts of the underwriting process are automated. An applicant gets an appointment with a specially-trained staff member for a telephonic interview. These staff members conduct telephonic interviews to assess the risks an applicant presents. The rest of the insurance processing is automated. Again, if necessary, specialised underwriters are consulted.
It is also possible to implement a hybrid solution for automating underwriting. After the applicant fills out an online application, the point of sale solution analyses risks and determines the policy details in simple cases. However, if risk assessment involves complexities, trained staff members conduct telephonic interviews to complete the process. Services of underwriters may also be utilised in some cases.