As stated in July, the more things change the more they stay the same - but how are systems checked and how are they assessed? Gill Salton explains.
System health checks
As an example of its type, SCOR, working with SelectX has developed an underwriting systems health check. This provides an overall view of the underwriting system including reviewing the rules, checking test cases, reviewing the system maintenance and also the level of management information being produced.
The underwriting systems currently used in our market are usually provided by reassurers or software companies, however, as SCOR does not provide its own underwriting system in the UK, we are able to provide an unbiased view of the quality, functionality and management of the system. Our health check focuses on a range of areas ( see table below below).
Health check Benefits
By reviewing the system in this level of detail we are able to help improve the effectiveness of the system both from a customer focus and a risk management view. This includes:
- Identifying any rules that may lead to an increased risk exposure.
- Helping to identify ways to increase the straight-through processing rate, which is key to maximising the resource and costs of maintaining the company’s highest performing underwriter.
- Identifying areas where the level of management information being produced could be improved with a view to optimising the usage of the system, e.g. reducing areas where the customer may fall out of the process.
- Helping to ensure the system is managed and maintained to ensure it remains up to date and continues to reflect the company’s underwriting philosophy.
- Improving the customer journey.
The review and management of underwriting systems can no longer be implemented as a light touch control. Having an in-depth review of all the aspects of the system will help to achieve the optimum benefits the system was implemented for.
If a company can demonstrate a robust underwriting system with excellent market leading management, this will result in the right cases being accepted by the system, with excellent processing times and reduced claims issues. This a win-win for all involved in the process – customer, distributor and provider. In essence, the cons of the underwriting system are eliminated and just the pros are left.
Underwriting system health checks are the way forward in ensuring your most productive underwriter is also your best underwriter. If you still need convincing, a last word from Mitch Ratcliffe (journalist, media executive and entrepreneur): “A computer lets you make more mistakes faster than any other invention, with the possible exceptions of handguns and tequila.”
Underwriting has come a long way in the 21st century but non-disclosure is still a potential problem and underwriting systems are a powerful enabler. A robust internal audit process, understanding of the non-disclosure profile and an efficient, risk aware underwriting system will refresh the process for underwriters and distributors alike.
Gill Salton is a senior underwriting and claims developer at SCOR Global Life
What does the underwriting systems health check cover?
