Improving performance in the area of new business and underwriting in today’s economic times is particularly important. Reduced customer affordability is forcing many carriers to lower profit margins in middle market products—underscoring the need to reduce the costs to put new business in place. Speeding up the underwriting procedure is also important, since the longer it takes to complete the underwriting cycle for a new account, the greater the chance the application might be abandoned or withdrawn. The automated capabilities of a new business and underwriting system are therefore increasingly attractive. Such systems can enable insurers to more rapidly process new applications and assess risk, while lowering the cost of issuing policies.
Why You Should Choose SaaS
Through a Software as a Service (SaaS) licensing and delivery alternative, the software capabilities are made available as a service—using the Internet to access the software in the cloud—with costs assessed on a per use basis. Thus, insurers do not have to acquire hardware, nor deal with costly software upgrades and maintenance costs. They can simply subscribe to a shared infrastructure and shared help desk services.
Across the industry, automated systems are delivering impressive benefits, including:
1. Faster cycle times – The automated system facilitates more rapid processing of new applications by using real-time validations, systematic ordering as well as receipt of requirements and automated workflows, resulting in faster close rates. By leveraging an existing infrastructure and out-of-the-box functionality carriers achieve shorter and more cost-effective implementation projects.
2. Improved accuracy – The rules-based decision engine used by these automated systems also significantly improve the accuracy of the new business and underwriting process.
3. Cost Reduction – Total cost of ownership for the software can be significantly reduced because of
the Web-based distribution methods. A cloud-based deployment reduces redundancy and achieves economies of scale in run and maintenance costs. Initial costs are also reduced because there are no upfront license fees involved; SaaS applications are subscription based.
4. More Scalable – As an insurer grows in terms of products, markets and customers, a SaaS licensing product grows with it. It eliminates the need to make expensive additional purchase of hardware nor deal with expensive software upgrades and maintenance costs. They subscribe to a shared infrastructure and a shared help desk service.
5. Better customer service – An effective automated system can increase proficiency and flexibility in the new business process, providing higher-quality service to both producers and customers. The Web-based system also offers advanced usability features in the new business application process.
Improve Policy Administration with SaaS
SaaS gives companies an alternative to buying, building and maintaining their own IT infrastructures despite lengthy installation times and exponential costs. Now, they can plug in and subscribe to services built on shared infrastructure via the Internet. This approach, allows companies to scale as fast and as much as needed without replacing costly infrastructure or adding IT staff. A recent Forrester Research survey of a thousand IT professionals revealed that IT managers also favor the SaaS approach since the subscription-based SaaS pricing model can keep IT budget costs consistent or lower than packaged or homegrown software.