Underwriting

Introduction

Insurance is defined as a “system to make large financial losses more affordable by pooling the risks of many individuals and business entities and transferring them to an insurance company or other large group in return for a premium.”[1]  A multitude of sources not only define insurance terminology but provide educational opportunities as well.  However, the business of insurance is generally poorly understood by those who do not work directly within the industry.

Consider, for example, a new consumer’s perspective of establishing a new relationship with a company for auto or homeowners insurance.  Many first-time buyers of personal insurance are in their late teens or early twenties.  They know that in order to drive off the lot or to get through closing, they need a policy and in some cases, this may be all that they know.[2]

Determining whether to accept a new customer is part of underwriting.  The underwriting process is designed to ensure that the expected financial risk to the company as presented by new customers does not exceed the price of the policy.  Once a policy offer by the company is accepted by the applicant, the relationship between the insured and company is governed by the contract issued by the company to the insured.  Multiple decision points exist throughout the initial and renewing policy terms to ensure that the risk originally accepted remains acceptable to the company, and if not, that appropriate underwriting action be taken.

The complexities in the underwriting process of the personal lines insurance industry are to a great extent based upon the contract and compliance with various categories of laws.  The affects of legal requirements as they apply to insurance consumers are found throughout all decision points of the underwriting process, which is first presented from the contractual perspective to serve as a comparison to the changes made to be legally compliant.

U.S. P&C Personal Lines Insurance Underwriting Process – Contractual Perspective
The life cycle of the underwriting process includes these steps:

1. An applicant requests a quotation or a policy.
2. When the risk is not acceptable, the agent or a company underwriter would so advise the applicant and the process would stop.  Until a policy has been issued, the company has no contractual obligations towards the applicant.  The risk may become acceptable if the applicant accepts a premium increase by:

a.     application of a surcharge

b.    placement in a higher rating tier

c.     placement in an underwriting company with a higher rating structure as compared to the company that received the applicant’s request, or

d.    partial acceptance of the coverage request.  For example, if an applicant requested towing coverage for a vehicle for which several towing claims were recently made, the policy may be acceptable so long towing coverage was not included for that particular vehicle.

These four decisions are types of an “adverse underwriting decision”, which refers to any decision in which the consumer is told “no” in any fashion.  “No, we won’t offer you a lower price” is why a surcharge or placement in a higher rated tier or company is adverse.  “No, we won’t offer everything you requested” is a restriction of requested coverage, and “No, we won’t offer a policy to you” is a refusal to issue.

3. When the risk is acceptable or made acceptable, the application will be rated, a quotation provided, and an offer to insure is made.  The offer may be good for a short time, perhaps a week.  Should the applicant not request coverage during this time, the underwriter may flag the file to follow-up with the applicant shortly before a competitor’s policy would expire (“x”-date follow-up) six or 12 months in the future.  When the applicant accepts an offer to insure, a policy will be issued.
4. By contract, a newly issued policy may be cancelled within a specified period of 30-60 days from the inception date.  Companies want to retain newly acquired business but reserve the right to cancel should additional information be received which, if known before offering to insure would have resulted in the offer not being made.  Cancelling a policy for underwriting reasons is another type of adverse underwriting decision. When an applicant did not fully disclose the driving record of all drivers to be rated on the policy, the underwriter may elect to cancel the policy rather than continue.  Or the policy may be acceptable if the insured agrees to an increased premium or a coverage restriction.  By contract the insurance company must send a written notice to the insured which conforms to contractual provisions when making an adverse underwriting decision.
5. The insured is contractually obligated to make timely and adequate premium payments to maintain the policy.  When adequate and timely payments are received by the company, the policy will continue. Otherwise, the policy would be cancelled based upon the contractual provisions regarding cancellation for nonpayment of premium.
6. Insureds have the right to request cancellation of the policy at any time.  When an insured requests cancellation and the risk is acceptable to the company, the company may attempt to keep the insured as a customer.  If successful, the policy will continue and if not successful, the company will cancel the policy and may set an “x”-date follow-up.
7. Insureds may requests policy adjustments during the policy term.  When there are no underwriting concerns with the policy or the request, adjustments will be made as part of routine servicing of the policy.  Also during the policy period, the company’s claim department may provide information about the insured or the insured property to the underwriting department.  If the information forwarded by the claim department is not judged to materially change the risk, the information would be noted in the file but no further actions would be taken. An underwriter will review requests to adjust the policy and information provided by the claim department.  When the characteristics of the policy, the adjustment request, or the information from the claim department is not acceptable to the underwriter, a review of the contract takes place to determine if an adverse underwriting action may be taken.  If permitted by contract, the underwriter may elect to send an adverse underwriting notice at that time.  If the risk is not acceptable but the contract does not permit action at that time, any changes requested by the insured may still be made.
8. The last type of adverse underwriting decision to be discussed is not renewing a policy, which is contractually permitted so long as sufficient notice is given to the insured.  Before the expiration date of the policy, a review of the policy for continued acceptability will be made.  When it is determined that the policy is no longer acceptable as written, written notice of nonrenewal, adverse modification, surcharge, tier placement, or company placement needs to be sent to fulfill the contract.  If the policy is continued, either as is or after certain adverse underwriting decisions, it is rated and a renewal offer is sent to the insured.

The underwriting process starting at step 5 then repeats until the policy is terminated, either by the customer or the company.  The link below is a graphical illustration of this entire cycle.
Figure 1 – Underwriting Process – Contractual Perspective
The effects of complying with the major categories of laws on the underwriting process follow.

U.S. P&C Personal Lines Insurance Underwriting Process – Contractual and Compliance Perspective

The contractual perspective of the underwriting perspective is simple when compared to the changes required to comply with federal and state laws that affect the business of insurance.[3]  Federal laws generally apply to entire industries or identified activities.  These two federal laws have a significant impact on the personal lines underwriting process.[4]

1. U.S. economic sanctions, administered by the U.S. Treasury’s Office of Foreign Assets Control (OFAC).  The emphasis on compliance with OFAC sanctions increased greatly following the terrorist attacks of September 11, 2001 on U.S. soil.  OFAC regulations affect the underwriting process by prohibiting financial transactions with individuals named on government sanction lists.
2. The Fair Credit Reporting Act, as administered by the Federal Trade Commission.  The FCRA, enacted in 1970 and last amended in 2010, affects the underwriting process when consumer reports are used in the underwriting process.

Each state has unique requirements but the focus here is on laws that are common to most states (with two exceptions).  To further narrow the focus, the illustration is limited to personal auto insurance although it would generally apply to all personal lines policy types.

The categories of state laws that significantly affect the underwriting of personal auto insurance are:

1. Generalized rating and service laws, referring to requirements that affect how a risk is rated or how service to the applicant/insured is provided.  Many of these requirements are derived from the National Association of Insurance Commissioner’s (NAIC) Model Act 880 – the Unfair Trade Practices Act. Introduced by the NAIC in 1947, the Act prohibits unfair discrimination between similar risks and offers other protections.  All states have adopted this model act, at least in part.[5]
2. Underwriting, referring to the initial determination of risk acceptability and continued acceptability.  All jurisdictions regulate adverse underwriting decisions of auto insurance, although the specific application varies (as to how restrictive or permissive the law is, the number of days notice required, type of mailing, etc.). 
3. Privacy and Underwriting combined, based on the 1980 NAIC Insurance Information and Privacy Protection Act, Model 670, and applied to P&C insurance by 13 states.[6]  The Act requires that insurers notify consumer of privacy rights and specific notices associated with adverse underwriting decisions.
4. Privacy based on the state insurance privacy laws required by the Gramm-Leach Bliley Act (GLBA) of 1999.  Forty states used NAIC Model Act 672, the Privacy of Consumer Financial and Health Information Regulation.[7]  The Act requires that insurers notify consumers of privacy rights and to take certain actions based on choices made by consumers.
5. Residual market or assigned risk plans provide basic insurance coverages for applicants who cannot obtain coverage in the voluntary market.  All locations have some variation of a residual market.[8]  Two states (New Hampshire and North Carolina) have reinsurance facilities which require insurers to service risks that the insurer would not voluntarily provide coverage for while the state is the reinsurer.  Both states also have “take-all-comer” requirements – an insurer must accept an applicant and cannot terminate coverage for underwriting reasons.

How these laws affect underwriting is discussed in general terms.  The affects of each unique state law have their own complexities in procedures, notices, training, etc., and the specific details of each requirement are intentionally undeveloped.  The color key below identifies these laws throughout the various steps of the underwriting process.
How these categories of laws affect underwriting is presented in a time sequence begining with a new applicant requesting a policy and ending with the policy being renewed.  All of the individual sequences are part of the underwriting process and are used as to graphically display the entire process with the color coding above.  The first category to discuss is economic sanctions.

U.S. Economic Sanctions (OFAC) Compliance – Confirming Consumers Are Not Sanctioned on U.S. Government Lists

This process starts when an applicant contacts an insurer, or an agent of the insurer, and requests a quotation for a policy.  From the insurer’s perspective, applicant means someone who:

• has not had a previous relationship with the insurer,
• obtained quotations or insurance with the company in the past but presently does not have any active business, or
• an active policyholder who is requesting a quotation for a new policy.

The U.S. Treasury, through its Office of Foreign Assets Control (OFAC), requires all American citizens and businesses to confirm that all persons they do business with are not named on government lists of sanctioned individuals.  This may be done by collecting from applicants the same information that appears on the government lists:  name, date of birth, address, Social Security Number (SSN), and the number and issuing country for a passport.  This information would then be used to screen the applicants against the lists.

All U.S. citizens are required to have a SSN.  Some but not all non-U.S. residents of the United States have been issued Social Security Numbers.[9]  Simple collection of the SSN of all applicants having a SSN will not necessarily lead to compliance with OFAC requirements.  Validation edits in the SSN field to prevent collection and reliance on duplicate numbers, invalid numbers, or number combinations that have not or will not be issued are needed[10].  If the applicant is not a U.S. citizen and does not have a SSN, then the passport information should be obtained to screen against the government lists.

When after screening there is a positive match, then financial transactions between the insurer and applicant is prohibited unless a license is obtained from OFAC before proceeding with the transaction.  Declining a risk is typically an underwriting function; however, according to OFAC, a declination in this case would be based on an Executive Order addressing foreign affairs which preempts state insurance laws.[11]
Figure 3 is a picture of the underwriting process with respect to an applicant requesting a quotation for a policy and compliance with OFAC requirements.
Consumer Report Compliance

Once it is determined that an applicant and all other prospective insureds are not sanctioned by OFAC, or if sanctioned but a license was obtained from OFAC, the next process is determining if a consumer report will be used to underwrite the policy.  Typical examples of the types of consumer reports used in personal lines insurance are investigative consumer reports, insurance scores, motor vehicle reports (MVR), and loss history reports (often generically referred to as a C.L.U.E. report, or Comprehensive Loss Underwriting Exchange).  Two laws affecting privacy, rating, and underwriting need to be addressed.

The Insurance Information and Privacy Protection Act (IIPPA) requires that before personal information about a consumer is obtained from a source other than the consumer or a public database that the insurer is to apprise the consumer of rights available under the act.  To comply with this requirement for applicants who do business over the phone when a consumer report will be ordered, a verbal scripting of these rights is required.  The Fair Credit Reporting Act permits insurance companies to obtain a consumer report when the report will be used in the underwriting process with an individual consumer.
The next phase of the underwriting process is determining if the risk is acceptable.

Quoting and Risk Acceptability and Adverse Underwriting Decision Compliance

The same three outcomes when determining acceptability exist:  acceptable as is, acceptable with modifications, or not acceptable.  The first two outcomes result in the risk being rated.  The last two outcomes require written notice of an adverse underwriting decision.

Two states require insurers to offer auto liability insurance to all who request it because such coverage is mandatory (often called a “take-all-comer” (TAC) requirement).  Insurers may not refuse a TAC under state law.  However, OFAC has issued an opinion that an insurer must refuse to write any request for insurance from for anyone on a sanction list or to obtain a license from OFAC before writing the policy.  The Fair Credit Reporting Act requires notice when the adverse underwriting decision is made, in whole or in part, upon information contained in a consumer report received from a consumer reporting agency.  IIPPA requires notice when the adverse decision is made regardless of whether a consumer report was relied upon.  The wording of an adverse underwriting notice is dependent upon:

•  whether the individual consumer is named on an OFAC list
•  the type of policy
• whether a consumer report was used
• where the consumer resides
• provisions of the state’s version of the Unfair Trade Practices Act and any other applicable state laws, and
• the contract between the insured and the insurance company.

When a quotation is provided and an offer to insure is made, the consumer will decide to accept the offer or not.  When the offer is not accepted, many insurers will follow-up.  When the consumer ultimately agrees, it may be necessary to order consumer reports.
Figure 5 shows how all this fits together.
If a request is made to issue the policy, then determining which written privacy notice or notices must be sent needs to be determined next.

Consumer Privacy Notice Compliance and Adverse Underwriting Decision Compliance

Insurers send consumers a privacy notice to comply with the requirements of the Gramm-Leach-Bliley Act (GLBA) privacy provisions.  IIPPA has separate privacy provisions than those of the GLBA.  In an IIPPA location, the consumer will receive both the GLBA and IIPPA privacy notices if the insurer does not voluntarily extend IIPPA privacy rights to consumers outside of IIPPA states.

GLBA requires the notice be given to all new consumers and then annually thereafter.  However, it would not be necessary to send an additional GLBA notice to an existing consumer.  IIPPA requires the notice to be provided with each new policy and also at least annually with renewal policies.

While a company may simply provide the GLBA notice with every new policy, there are consequences to doing so.  There is an expense associated with printing, paper, postage, etc.  More practically, a company may not legally alter its data sharing practices without having first notified all affected consumers.  This means that if the company relies on its annual GLBA notice, it could time changes to when the mass mailing is sent.  If, however, the company routinely sends a GLBA notice, then it would have to send an off-cycle notice, thereby changing the date of the mass mailing.  From a consumer perspective, there could be several notices received in the mail addressing privacy matters.
Once the privacy notice process is complete, the company enters into the initial underwriting period in which it may re-assess its risk decision.
Initial Underwriting Period Risk Acceptability and Adverse Underwriting Decision Compliance

Some companies avoid the expense of consumer reports when preparing a quotation.  If the applicant decides not to buy a policy, this expense is not incurred.  Most locations allow insurers a set amount of time, typically 45 or 60 days, in which to evaluate its risk decision.  For insurers that wait to order consumer reports until after a policy has been issued, the company evaluates the information provided by the consumer report and determines if the risk is acceptable.  The outcomes are the same as before:  acceptable as is, acceptable with modifications, or not acceptable.  Once again, the first two outcomes result in the risk being rated.  The last two outcomes require written notice of an adverse underwriting decision.

When the policy is continued, either as is or following an adverse underwriting decision, the insured is contractually obligated to make timely and adequate premium payments to maintain the policy.  This is a continual process occurs which occurs throughout the life of the policy.  When appropriate amounts are timely received by the company, the policy will continue.  Otherwise, the policy would be cancelled in accordance with the contractual provisions regarding cancellation for nonpayment of premium.
The next process, which is also continuous, encompasses insured’s requests to cancel the policy, making decisions regarding consumer requests for policy changes and/or communication from the company’s Claims Department that may be made during the life of the policy.

Consumer Requests (Policy Cancellation or Policy Adjustments), Claims Department Communications, and Adverse Underwriting Decision Compliance

An insured may request to cancel the policy at any time during the policy term.  If the company’s experience with this consumer is favorable, the company may attempt to change the insured’s decision.  If this effort is favorable, then the policy is allowed to continue.  If not, then the policy is cancelled and any unearned premium must be timely returned.  If the company’s experience is not favorable, then the request would likely be fulfilled without any further action or follow-up.  Also throughout the life of the policy, the insured may make requests or the company’s claims department may send notices to the underwriting department.  The request or the information provided has to be evaluated, after which it may be determined that request or information means the risk is acceptable as is, acceptable with modifications, or not acceptable.

The first two outcomes result in the risk being rated.  The last two outcomes require written notice of an adverse underwriting decision, if the laws of that jurisdiction permit sending notice at this time.
If the policy is continued, the next process is the review of the risk to determine continued acceptability before the company agrees to renew the policy.
Periodic OFAC Compliance, Renewal Risk Acceptability and Adverse Underwriting Decision Compliance
Periodically, OFAC expects that businesses check the government lists again to validate that there are no matches.  This may be done as often as determined by the company to be prudent, but it is likely done before a policy renews or paying a claim.  Renewal risk reviews are usually completed by insurers before each policy renewal, regardless of the periodic OFAC review.  Insurers typically check all insureds’ experience with the company.  Unfavorable factors, such as a poor payment or loss history are considered.  If it is decided to obtain a consumer report, it may be necessary to provide the appropriate notifications before doing so.

If a consumer report is obtained, it must be evaluated with sufficient time to send a notice of adverse underwriting, if that is the ultimate decision.  Any information provided by the company’s claims department is evaluated during this review also.  Once again, the outcome of the evaluation is acceptable as is, acceptable with modifications, or not acceptable.
The first two outcomes result in the risk being rated for an offer to renew the policy.  The last two outcomes require written notice of an adverse underwriting decision, if it is permitted to send notice at this time.
If the policy is continued, it is then rated and renewed.
The final process is determining which privacy notices to send with the offer to renew the policy.

Renewal Consumer Privacy Notice Compliance

As previously noted, if the GLBA notice was already sent within the past year, it is not necessary to send it for the renewal of this policy.  However, the IIPPA notice must be sent with the policy at least annually.

From here, the cycle continues throughout the life of the policy. While this may not be the exact steps or sequence of steps that are followed from company to company, this presentation shows the essential processes and complexity of personal lines insurance underwriting.

The link below shows how all of these processes fit together into a cohesive flowchart.
Figure 10 – Underwriting Process – Contractual and Compliance Perspective
Summary
Most insurance consumers believe the business of insurance is difficult to comprehend, even though there are educational opportunities to learn more about insurance.  Insurers are bound by the contract issued to insureds and have incentive to maintain positive customer relationships in order to remain profitable.  When insurance companies do not abide by the contractual language or fail to comply with statutory requirements, the consequences to the company range from negligible to catastrophic.  Additionally, not only consumers but regulators, examiners and auditors, rating agencies, and courts expect insurers to comply with all applicable contractual provisions and regulations.
As demonstrated in the preceding graphs, insurance is made even less comprehensible to consumers and others outside the industry based on changes to processes necessitated to comply with the various laws that affect the business.  Although both consumers and companies would benefit from consumers being better informed, when considering the range of regulatory requirements above the contractual provisions, the insurance industry has limited opportunities to simplify its processes so that insurance consumers achieve a level of understanding with any significant depth.
Appendix A:  Major U.S. Federal Laws and General Affects on P&C Personal Lines Insurance Companies

Citation	Description	Federal Authority	General affect(s)
15 USC 1011 et seq.	McCarran-Ferguson Act	Federal Trade Commission (FTC) – Bureau of Competition	Limits the FTC’s antitrust oversight and stipulates that states are the primary regulator of insurance
15 USC 1681 et seq.	Fair Credit Reporting Act (FCRA)	Federal Trade Commission – Bureau of Consumer Protection, Division of Financial Practices	Must have permissible purpose to order consumer reports; requires notification if consumer report is used in an adverse decision; identity theft protection
15 USC 6701	Requires licensing of insurance producers	None – state insurance departments regulate producer licensing	All persons involved in selling insurance must obtain a state-issued license
15 USC 7001	E-SIGN (Electronic Signatures)	Department of Commerce – National Telecommunications and Information Administration, Office of Policy Analysis and Development	Facilitates commerce via the internet by providing for electronic validation of transactions
18 USC 1033; 18 USC 1034	Crimes by or affecting persons engaged in the business of insurance whose activities affect interstate commerce	Department of Justice – Attorney General	Prohibits persons with a felony conviction involving dishonesty or a breach of trust from working in the insurance industry
18 USC 1956; 26 USC 6050I; 31 USC 5312; also see IRS/FinCEN Form 8300 and IRS publication 1544	Cash payments over $10,000	Department of the Treasury – Internal Revenue Service (IRS) and Financial Crimes Enforcement Network (FinCEN)	Requires anyone who receives a cash payment more than $10,000 to report the receipt of same to the IRS (money laundering control)
18 USC 2721 et seq.	Drivers Privacy Protection Act	Department of Justice – Attorney General	Restricts state motor vehicle departments from releasing information from a driver’s license
28 USC Appendix	Federal Rules of Civil Procedure	U.S. District Courts	Procedural rules for District Courts, see especially Rules 26 and 34 (discovery of electronic records)
42 USC 1395y (b)(7)&(b)(8)	Mandatory Insurer Reporting	U.S. Department of Health and Human Services – Centers for Medicare and Medicaid Services	Liability, Self-Insurance, No-Fault Insurance and Workers’ Compensation insurers must report payments made to Medicare beneficiaries
42 USC 3604; 42 USC 3605	Fair Housing Act	Department of Housing and Urban Development (HUD)	Prohibits redlining in the sale of insurance for homes in the HUD program
42 USC 4001 et seq.	National Flood Insurance Program	Department of Homeland Security – Federal Emergency Management Agency	Provides insurance for the peril of flooding for owners and tenants of real property
47 USC 227; 47 CFR 64.1200; 47 CFR 64.1601; FCC 03-153 Appendix A, 16 CFR 310	Telemarketing Sales Rules – National “Do Not Call” Registry	Federal Communications Commission – Consumer & Governmental Affairs Bureau	Restricts the circumstances when marketing calls may be made
49 USC 30502; 49 USC 30504; 49 USC 33109; 49 CFR 544 et seq.	Stolen, junked, and salvaged vehicles	Department of Transportation – National Highway Safety Administration	Selected insurers must report title information about stolen, junked, and salvaged vehicles to the Secretary of Transportation
49 USC 33110; 49 USC 33112	Passenger motor vehicle information database	Department of Transportation – National Highway Safety Administration	Insurers must report information regarding premiums, damage susceptibility, crashworthiness, degree of difficulty of diagnosis and repair of damage to, or failure of, mechanical and electrical systems
50 USC App. 501 et seq.	Servicemembers Civil Relief Act (SCRA)	Department of the Treasury – Office of the Comptroller of the Currency	Provides protections for active duty military personnel including a reduction of interest on loans (affects premium financing)
31 CFR 103.170	Anti-Money Laundering Program	Department of the Treasury – Office of the Comptroller of the Currency	None – exempts property and casualty insurers from the requirement to have an anti-money laundering program
31 CFR 210 et seq.	Automated Clearing House (ACH)	Department of the Treasury – Bureau of Financial Management Service	Regulates ACH entries with the electronic funds transfer (EFT) system
45 CFR 160 et seq.	Health Insurance Portability and Accountability Act (HIPAA)	Department of Health and Human Services – Office for Civil Rights	Provides requirements to obtain, use, and store health information
50 USC Appendix Sec. 5; 31 CFR 103; HR 1268, Section 202 (CFR 23); 31 CFR 500 et seq.; 501 et seq. (See also U.S. Treasury Bulletin, “Foreign Assets Control Regulations and the Insurance Industry”, 4/29/04)	Trading with the Enemy Act and Office of Foreign Assets Control (OFAC) Requirements	Department of the Treasury – Office of Foreign Assets Control	Requires:  (1) insurers to confirm that prospective employees, customers, and business partners are not on government sanction lists before engaging in financial transactions with these individuals or businesses; (2) periodic confirmation that active employees, customers, claimants, and business partners are not on government sanction lists; and (3) prohibits transacting business with individuals from specified countries
§ 8B2.1	Federal Sentencing Guidelines	United States Sentencing Commission	Requirements for an effective Compliance and Ethics Program
The Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203	Federal Insurance Office	Department of the Treasury	Monitors all aspects of the insurance industry.  Coordinates and develops policy relating to international agreements.

Appendix B:  Insurance Information and Privacy Protection Act State Populations[12]

April 1, 2010 Population Estimates
	IIPPA States	Population
1	Arizona	6,392,017
2	California	37,871,648
3	Connecticut	3,574,097
4	Georgia	9,687,653
5	Illinois	12,830,632
6	Kansas	2,853,118
7	Maine	1,328,361
8	Minnesota	5,303,925
9	Montana	989,415
10	Nevada	2,700,551
11	New Jersey	8,791,894
12	North Carolina	9,535,483
13	Oregon	3,831,074
14	Virginia	8,001,024
	Total IIPPA	113,690,892
	US	308,756,648
	IIPPA	36.8%

Background
The property & casualty insurance industry continues to face challenging market conditions.  Premium rates continue to drop while at the same time the economic slump results in exposure basis reductions.  In the face of this premium shrinkage, carriers are trying to hold the line on expenses even as they strive for higher submission and policy counts to keep premium revenue up. Agents who face their own revenue pressures are now shopping more risks around and demand greater ease of doing business from their carriers. At the same time, underwriters are under constant pressure to improve underwriting quality and discipline. Through it all, internal processes are cumbersome, key systems are inflexible, and any changes involve major commitments of people, time, and money with uncertain results.
Challenging times indeed!  I’m not fond of “perfect storm” analogies, but if you feel like George Clooney trying get his fishing boat up over that wave, or Mark Wahlberg at the end, stretched out in his survival suit one hundred miles from land, we need to talk!
It is time to modernize and optimize your underwriting processes, even in the face of challenging times.  There are technologies and methods emerging that can do all kinds of interesting things, but before selecting the technology, we have to figure out what our new process should be.  So let us consider what carriers really want their underwriting process to be, and then look at what technologies can get us there.
The carriers speak out
We conducted three separate research studies where we surveyed Commercial carrier CEOs and senior management for their input with regard to pain points, emerging technologies and underwriting management systems.  Let us share with you some of our key findings.
1. Strategic Technology Investments to Combat the Soft Market – A Survey of Commercial Insurance Executives (Conducted by The Ward Group)
Meeting technology expectations of agents and employees is significant and often overlooked.  Beyond the profit and loss improvements that technology investments are expected to deliver, there is a growing expectation among agents and employees, especially among younger professionals, that technology should be easy to use, friendly, and cutting-edge.
In this survey conducted by The Ward Group, commercial carrier CEOs were asked ten questions about technology implementation, how technology helps them compete against other insurance companies, and the use of technology for underwriting activities.
The findings clearly show that technology is recognized as a powerful competitive weapon.  Eighty-five percent of executives polled indicated that technology can play a “significant role” or a “more than average role” in their companies’ ability to compete against other carriers.
Additional benefits that these executives expected from technology investments and a modernized underwriting system were:

• Improved underwriting productivity and reduced underwriting expense
• Reduced loss ratio
• Ease of doing business
• Better individual risk selection and pricing
• Better understanding of the entire book of business
• Streamlined processes and reduction of expenses
• Meeting expectations of agents and employees

The survey participants also provided, in their own words, what they believe are the most important ways to implement new systems or to invest in new technologies that will help in a soft market:

• “Technology is key to accomplishing underwriting and processing more efficiently….”
• “Make it quick and easy for the agent to do business and they are more apt to use your products in a soft market.”
• “If agents have to rekey to do business with us, they will place the business elsewhere.”
• “Automating underwriting rules will speed up policy processing and shorten turnaround time.”
• “Quickly understand at what price level a risk can be written and still make a profit.”
• “New systems and technologies…allow underwriters more time to review the risk and make more qualified underwriting decisions.”
• “Improved efficiencies give underwriters the opportunity to review more submissions.”
• “Technology can differentiate a company from competitors.”

2. Mid-Tier Carrier CEO Study (conducted by Phelon Group)
When surveyed about pain points, the predominant concern for mid-market P&C carriers (48%) is how to get profitable business on the books in the softening market.  Executives recognize that their current underwriting processes are grossly inefficient, partly due to processes based on outdated legacy systems.  However, they believe that their intellectual capital lies in their existing systems and analytics, and they are unwilling to walk away from that competitive advantage.  Carriers are looking for ways to leverage this asset and to further codify their knowledge to get profitable business on the books.
Regarding underwriting challenges, executives chose the following priorities:

• Improving ease of doing business with agents (33%)
• Automation of underwriting (30%)
• Straight-through processing (30%)
• Integration with predictive analytics systems
• Management visibility
• Sharing of best practices

The participants shared with us some of their perspectives:

• “Getting the business on the books and pricing properly with respect to risk is my main concern. Profitability is key.”
• “Our legacy systems create huge inefficiencies and the bodies we need to process the underwriting are too heavy.”
• “It is hard to establish true and profitable pricing in a softening market…We need better tools to analyze trends and create pricing that accurately reflects the market.”
• “We looked to the market for a 3rd party solution, but we could not find one that met our customization requirements. Whatever we would choose would have to integrate with our system to leverage the investments we have already made in customizing our policies and pricing.”
• “We operate in a highly competitive market and need to make it easier to work with our agents.”

3. Magic Wand Survey (Conducted at NAMIC Commercial Lines UW Seminar)
Earlier this year, we asked senior and underwriting managers, “If you had a magic wand, what top benefits would you want from an underwriting automation system?”

• The overwhelming winner was increased efficiency and productivity. It got the most votes and the most number #1 votes.
• Tied for second place were both speed & agility and ease of use (for underwriters). Managers are looking for user-friendly, intuitive systems that will make it easy to do their jobs without adding complexity or requiring extensive training. At the same time, they are looking for agility, the ability to change their rules, data, and processes quickly to respond to changing market conditions.
• The fourth most popular response was ease of doing business with agents.

These four responses all address the need for better workflow and systems in the underwriting process. Additionally, our surveyor shared with us some insightful comments.

• “We want increased premium capacity with the same number of staff, for profitable growth.”
• “I want to reduce the number of people handling a submission and cut down on the back-and-forth questions between underwriters and agents.”
• “We want to improve the customer experience.”
• “The ideal system would allow our customer – the agents – to interact with our associates and view the system together.  This would allow us to provide better service.”

The remaining responses included:  integration of disparate systems into a unified underwriting desktop, management visibility, discipline & consistency, scale the business, and predictive modeling & analytics. (It is interesting to note that all of these items received some first and second place votes.)
How much we’ve spent, how little we’ve changed!
A few months ago I was involved in a discussion about the challenges of tracking submission activity and turnaround times. It reminded me of how little we have accomplished over the last 25 years. The question had to do with what to use as the received date/time for a submission – when it was received in the mailroom/imaging station, when the underwriting assistant got it, or when the underwriter got it.  I realized that I had that same discussion with my business users 25 years ago. While certain steps had been automated in and of themselves, we still have basically the same processes, the same steps, the same people!
With today’s capabilities, a submission could be received through upload or agent portal entry (including supplemental data and attachments). Any necessary web services could already have been run in accordance with carrier rules (e.g., address scrubbing, geo-coding, financials, etc.) and attached to the account.  It could immediately appear on the assistant’s or underwriter’s work queue.  Submission tracking from that point could auto-magically be done by the system and available in real-time through a dashboard.
But that is not where most carriers are today. Generally, we have automated various individual steps, but the overall workflow is still a manually-controlled one, performed by the mailroom, imaging, clerical, and underwriting staff.
For example, we’ve spent millions of dollars to go paperless, but in many companies, underwriters still are pulling up electronic images and re-typing data into another system, just like we used to do with mailed-in or faxed-in paper. This is wonderful document management and forwarding, but is still the same old workflow. In fact, underwriting team members may be re-typing information into their rating engine and/or quoting system. They are probably re-typing into multiple web services like D&B, Choicepoint, geo-coding, engineering survey, loss control vendors, etc. And maybe they are still typing to get loss history, customer id’s, submission file labels, and who knows what else.  (Take a little test: How often does your entire staff enter, type, or write the insured name, whether it is in a system, on a letter or form, on a label, in a web service, etc.?  Once, twice, four times, seven times, ten times, more?)
How many of us still pass paper from one person to the other – underwriter to assistant, rater, or referral underwriter? How many of us still take hours or days to acknowledge receipt of a submission, to collect the supplemental data needed to underwrite it, to generate a quote, to get the agent’s feedback? How long does it normally take to resolve a 30-second issue between the underwriter and the agent or the underwriter and his/her supervisor? How long does it take to send, receive, research, make a decision, and reply to a referral?  On the other hand, how long would it take if all the information were presented to the underwriter and manager in context, a click or two away, and the transmission was instant?
And that’s just what we do to ourselves.  How does an agent feel about how we help him/her provide service to their customer?
Our business processes are constrained by our old systems and our old patterns. Our systems treat underwriting as a data entry process for policy administration instead of a unique workflow with its own set of players, sources of information, processes, and rules.  And our ideas tend to be limited to this view of what is possible.
We need to break free of this mindset – to be able to see what is possible. Let’s start with a list of workflow “don’ts”, things that underwriters and agents shouldn’t have to do or use anymore:

• Tracking sheets
• Typing in data from a paper or from one system to the other
• Waiting for a paper file to be pulled or received
• Having to close one submission in the system to be able to access another
• Re-typing data into another system to get a loss control, loss history, credit report, MVR, VIN validation, etc.
• Searching through the underwriting manual or old emails to find that company directive on writing xxx LOB in yyy territory
• Agent entering 5 screens of data only to find out you don’t write that class at that size in that state
• Waiting two hours for an agent/underwriter to get back in the office to check their files on something
• Losing the account because someone misplaced the submission paperwork
• Finding out six months later that an agent/underwriter shouldn’t have quoted that account because it was outside your appetite or their authority level
• Collecting information, printouts, separate documents, and the underwriter’s notes to pass it on to the referral underwriter
• Reconciling your agent portal quote with your backend rating quote

Now let’s review what types of emerging technologies are ready for prime-time and then think about how we can do things better.
Emerging technologies
Over the last several years, there have been many exciting advances in technology and what you can do within the context of business operations. By and large, most of these are still on the wish-list for carriers and, for that matter, for insurance systems vendors. But these emerging technologies provide the new foundation to break free of the older system/technology constraints that have kept us stuck in our old workflows.
Service-Oriented Architecture
One of the most basic innovations is Service-Oriented Architecture (SOA). SOA breaks application systems into separate “services” that can receive input parameters, run, and return their result set to whoever invoked them. Each service acts like a building block that can be used and re-used in various contexts, like a Lego block. This allows applications to be assembled from appropriate services: You’d like to check the customer’s financial status? Just plug in a Dun & Bradstreet report. SOA provides a more flexible and more sustainable way to set up your enterprise applications.
Note that retrofitting existing applications into a service-oriented architecture can be challenging. Some major subsystems (e.g., rating, policy issuance) may be able to be broken out into services to let the legacy system play with newer SOA applications, but a full rework of legacy applications is rarely practical.
However, SOA is clearly the best practice now and all new applications, whether built in-house or acquired from solution providers, should be service-oriented architecture solutions.
Web 2.0 & rich internet applications
Web 2.0 or Rich Internet Applications are generic terms that refer to the use of technologies and methods to bring new levels of interactivity and real-time behavior into browser-based applications.  Examples are the use of blogs, wikis, chat, social-networking, photo/video, and voice.
What’s new is not so much the technical capabilities themselves, but the new forms of mass use that have sprung up as internet access has expanded past critical mass. People have been sharing files and chatting over the internet for decades.  But now it is so common and standard that internet applications are being built around these capabilities, with documents and streaming video and chatting as a part of the application interaction. Witness Facebook, dating services and even the NBC Olympics website.
Similarly, Web 2.0 offers new options for how we do business in the insurance space. We can incorporate chat, real-time notes, flexible file/video attachments wherever they can improve the quality and/or speed of the process.
Configurability
Configurability refers to the ability to specify or change details of a system without having to touch the underlying base code of the system. The concept is not new – vendors have talked about being configurable for a couple of decades.  But both the breadth and the ease of configuration has improved dramatically in the last several years.
In the past, configurability usually referred to the ability to redefine the values of a few fields to fit a carrier’s specific data requirements, or a control table that would direct processing between a few pre-defined paths. But now you have the ability to truly define or redefine any and all the data elements, values, supplemental data, screens and screenflow, edits, risk selection and appetite rules, underwriting guidelines and best practices, straight-thru processing, assignments, referrals, users, permissions, letters of authority, and the internal and external services you want to perform. Before, you could tweak your hard-coded process with a few variations.  Now you can configure virtually your whole process for each line of business, geography, distribution channel, and even each individual.
Configuration has gotten more powerful and much easier.  In the past, the “configuration” was done by the vendor’s programmers, either in native programming code or through a proprietary pseudo-code.  Today, the advanced solutions in the marketplace offer point-and-click configuration tools that allow business system analysts or developers to specify what should happen.
Configurability is another best practice that carriers should insist on as they look at new solutions.  (But make sure you get to see and try it – everyone says they are configurable, but what they actually offer varies widely.)
Rules & workflow engines
Rules and workflow engines allow the definition of specific business rules and/or process workflows separate from the system’s data and screen handling.
This segregation of the rules and/or process steps allows for easier modification of the rules and/or process without having to change the underlying base code. For instance, if the carrier decides to tighten their underwriting rules, change their assignment rules, or tweak their scheduled credit ranges for a specific territory and class, the change may be made to the appropriate rule or workflow, and the application will automatically absorb that change every place the application uses that rule or workflow.
In addition, these engines permit separate and more effective management and facilitate re-use of the business rules and workflows across the carrier’s entire business operation. (Rules and workflow engines are different from each other, though in some installations they overlap, but are similar in how they relate to the business application.)
Separate external rules and workflow engines have been available for many years. But, in reality, their effectiveness in insurance applications has often been limited. Traditionally they have been toolkits with little or no applicable insurance content out-of-the-box.  As a result, you would have to build a new application from scratch, or you would have to integrate the external rules/workflow into your existing legacy systems. Either approach involves significant cost and time. In addition, often you would find that you can’t efficiently invoke the rule/workflow engine everywhere you would like without prohibitive performance overhead (e.g., invoking a rules engine at the field level).
In recent years, however, modern configurable solutions are increasingly emerging with embedded rules and workflow capabilities.  These products offer the necessary level of rule and workflow management while also providing standard insurance rules and workflow out-of-the-box, allowing configuration of company-specific rules and practices, and performing efficiently at any level in the application (e.g., pre-screening, field-level, screen-level, assignment, quote, referral, etc.). This can enable the carrier to implement a modern solution with configurable, embedded rules and workflow in a much more reasonable time and cost.
Underwriting 2.0 – the platform of the future
Okay, so that’s the technology with all of its marketing glory. But let’s be real. What can these emerging technologies do for our process?  Can they bring all our islands of automation into a coherent, efficient underwriting process? How will they really improve productivity and quality for the underwriter and the agent? What can the modern process be like?
Above we reviewed some of the “don’ts” that have plagued our workflows for the last few decades. Let’s start looking forward and defining some “do’s” as principles for our future underwriting process.

• Everything you need to see in one place (not in different systems, email, the fax room, your in-basket, the document management system, etc.).
• Everything in 1-3 clicks – everything!
• (account, submission/policy header, application, correspondence, attached files, web service reports, external system data (loss history, loss control, payment history), underwriting worksheets, rating worksheets, predictive. analytics model results, rating, rating factors, quotes, ….).
• Everything is accessed and updated real-time.
• Everyone is notified of everything relevant, immediately.
• Underwriters and/or agents can work with each other, not at each other, in one process (notes, chat, shared view/update, instant update and communication).
• Multiple accounts open at once (a click away).
• Straight-thru processing for the clear winners and losers and, for the rest, everything set up in one desktop for the underwriter.
• Automatic advice and reminders for the underwriter based on account characteristics or activity.
• Intuitive, easy-to-learn, easy-to-use  (insurance terminology, no Save buttons, even a configurator designed for real insurance people and processes).
• No re-entry – ever.
• Configurability to keep the system current with the business needs and opportunities.

These are all possible today. The technologies are available now, and people are using them to do exactly these kinds of things (though not always in insurance). And they don’t require tens of millions of dollars and years of waiting. The first step is realizing that this is the business process you want.
What you need is a single platform, an integrated desktop, a control station for the underwriter and the agent that has all the necessary steps and resources right there. Tasks that don’t require human intervention happen automatically ahead of time. Tasks that require professional judgment or decision are automatically queued up for the underwriter and agent – with all the appropriate research, background information, and pre-analysis needed to make the best possible decision available at the click of a mouse. This new desktop and process is integrated with and leverages the carrier’s existing systems, data, rating, forms, models, and knowledge resources. Communication and collaboration with others is instantaneous and part of the account record. The platform and the process are intuitive for underwriters and agents. And all aspects of the desktop and the process can be adjusted, added to, or redirected as fast as the market changes.
Let’s now explore in more detail how this type of platform works and what it delivers.
Agent productivity & ease of doing business
Underwriting 2.0:  The agent can upload a submission from their agency management system or can easily enter a submission from scratch. The entry process and screens are intuitive so agent training and errors are minimal. The agent desktop provides quick pre-qualification and risk appetite feedback so the agent doesn’t waste time submitting risks that the carrier is not interested in. Supplemental data is prompted for at entry while the submission is still in front of the agent. Electronic documents, photographs, loss runs, and notes can quickly be added to the submission as a part of entry. When the agent submits the risk, it goes directly to the appropriate assistant’s or underwriter’s desktop and the receipt is confirmed to the agent instantaneously. The entire process of submitting a risk, including supplemental data and attachments, only takes 5 – 15 minutes from the agent’s desktop to the underwriter’s desktop.
Quotes (including multiple quotes and quote options), agent responses, re-quotes, bind requests, and binders are prepared and delivered in real-time. Now the agent and underwriter can work through a rush quote much more efficiently and accurately, collaborating and communicating together on the same system.
For example, the new platform utilizes immediate alerts and notifications, notes, live chat (like Instant Messenger), email correspondence, shared viewing and update of the account.  This enables the agent and underwriter to resolve questions and move the account along as fast as possible without time-wasting email, fax, and voicemail delays and constant account pick-up/put-downs and handoffs.
The Result:  The agent wants to bring business to you because he/she can get a confirmation, quote, and binder from you faster and more efficiently than with any other carrier. Both sides benefit and help each other succeed.
Underwriter productivity
Underwriting 2.0:  The system automatically prepares the risk for the underwriter’s consideration. Leveraging its SOA platform, the platform can pre-assemble carrier system data (e.g., loss history, loss control, payment history), web service data (e.g., MVR, Xmod, financial, geo-code, etc.), and predictive analytics results, or it can allow the underwriter to select what information is appropriate for this risk.  In addition, the desktop analyzes the submission to either highlight risk conditions or characteristics for the underwriter’s attention or to require a referral based on the carrier’s underwriting best practices, knowledge base, and the underwriter’s letter of authority.  Given all of this information about the account, using its embedded rules capability, the desktop advises the underwriter or automatically drives the appropriate processing for the risk.  The platform also can screen out clear winners and losers for straight-through processing before the underwriter has spent any time on the risk, can also present it to the underwriter with best-practice advice, or can flag the account to require a referral.
These features allow the underwriter to spend more of his/her time underwriting, concentrating on the risk characteristics and the appropriate price. Everything the underwriter needs is on the desktop, just clicks away –  the complete application, attachments, notes and chat, external web reports, underwriting guidelines and best practice checklists, rating and pricing, quote and bind capabilities, issuance, endorsements, cancellations, renewals, and dashboard visibility.
For example, the underwriter prepares any worksheet items that have not been prefilled and generates one or more quote options and proposals in real-time.  If a referral is required, the full account and all of the backup information can instantly be placed in the referral underwriter’s queue for their review and decision.
Once the quote is released to the agent, an alert pops up on the agent’s desktop and an email is sent to the agent with the quote attached to notify them immediately.  The agent and underwriter can now collaborate through chat or notes and can share views and updates of the risk.  This helps the underwriter to instantly respond and modify the quote if appropriate, lets the agent accept the right quote, and lets the underwriter close the business in real-time.
Finally, when the underwriting process is completed, all the policy information and documents are passed to the carrier’s existing systems of record so the existing processes and systems are not disrupted. Throughout the entire underwriting process, all information and actions are saved in a detailed audit trail for reference by the underwriter, the referral underwriter, a claims adjuster, loss control, billing, and auditors.
The Result: The Underwriter spends more time underwriting,  handles more quotes, and writes more business. Setup activity is automatic, incorporation of web data and carrier knowledge happens in real-time, communication is instantaneous, and the agent gets their response as quickly as possible. Ultimately, agents bring you more business because you get them an answer first.
Underwriting quality/discipline
Underwriting 2.0: The underwriting desktop needs to enforce quality as well as productivity. Quality underwriting is the key to an insurance carrier’s profitability. This platform will use its embedded rules engine and the external data from web services and the carrier’s systems to guide and enforce best practices throughout the underwriting process.  Every step of the process is assisted by contextual business rules that advise the underwriter and/or drive the process – the initial screening of the risk, the analysis of the risk characteristics, the knowledge-based reminders, assigning appropriate tiering/rating/pricing factors, checking electronic letters of authority, and automatic referral flags.
The Result: Quality is built right into the process. Underwriters are advised and directed in accordance with the carrier’s guidelines and best practices every step of the way.  Rather than relying on the underwriter to find and use paper- or email-based directives and after-the-fact audits, or forcing all risks through a referral process to ensure senior underwriters’ review, the desktop will lead every underwriter through the carrier’s approved risk analysis and pricing regimen. The carrier’s book will be accurate, consistent, and auditable.
Incorporating predictive analytics
Underwriting 2.0: Predictive analytics brings sophisticated analysis into the underwriting process, but only if it is used. Rather than modeling being a separate activity that involves additional work, the new platform will incorporate predictive analytics. The underwriting desktop can then directly apply model results to screen risks out, qualify them for straight-through processing, alert the underwriter to the key risk characteristics, pre-fill rating and pricing factors, and/or mandate referral processing. Having the best information and analysis available lets your underwriters assign the best price – aggressive pricing for the winning accounts, and defensive pricing for the marginal accounts.
The Result:  Incorporating predictive analytics into the underwriting process helps the underwriter write better business at the best price.  Precision pricing on top of informed risk selection and underwriting quality will produce the most profitable book of business.
Actionable knowledge management
Underwriting 2.0:  So often, a carrier’s underwriting knowledge and experience is locked up in senior underwriter’s heads or buried in underwriting manuals and email archives. The new platform leverages this intellectual capital within the underwriting process. By capturing and presenting knowledge items within context of specific risk criteria, they become actionable – suggesting attention to specific characteristics, requiring specific action, enforcing a referral, or performing an automated function.  Every underwriter will receive the benefit of the carrier’s best underwriters’ guidance and best practices as they are underwriting an account.
The Result:  Retaining the knowledge of our senior underwriters and training our junior underwriters is one of the major challenges in our industry today. Capturing and presenting underwriting knowledge through the underwriting desktop protects and leverages this most valuable asset, giving your junior underwriters the benefit of your best underwriters’ wisdom and experience where it matters most, right within the underwriting of the account. Actionable knowledge management will improve the quality of the book of business, preserve the carrier’s knowledge assets, and enable easier training of junior underwriters.
Visibility
Underwriting 2.0:  In today’s insurance world, everyone needs to know how they are doing against their goals. The new platform will track and display everything that has been processed through a real-time dashboard. Both individual underwriters and underwriting management have detailed, easy-to-read, and configurable displays of key metrics such as item and premium counts, ratios, and turnaround time. Further drill-down into those metrics are also available with a few clicks of the mouse.
The Result: Underwriters and managers now have real-time statistics that reflect what is being processed and written, enabling them to recognize and respond to their own progress as well as market changes and opportunities.
Configurability
Underwriting 2.0: Even while the new streamlined process is being laid out, changes are inevitable. As such, the new platform can’t be a rigid solution that requires costly and time-consuming intervention to manage any such changes. It needs to be able to incorporate new information, new rules, new knowledge, and new services with ease – through simple configuration – in order to keep the underwriting process current.
A truly configurable system enables changes to data, screens, edits, rules, documents, and screenflow to be implemented quickly and accurately by business analysts with only modest technical skills. When the market changes, the carrier’s appetite or capacity shifts or new opportunities arise, the underwriting desktop can be changed on the fly with them.
The Result:  The ability to quickly respond to the market changes and position your products and underwriting attention to new opportunities before your competition provides a clear competitive advantage.
Modernize, optimize, transform – start now
Can you underwrite business as efficiently and effectively as you think you should be able to?  Or, are you constrained by your existing processes and systems?
Are your underwriters spending most of their time underwriting?  Or are they chasing information and doing an hour of setup and data entry for every half-hour of true underwriting?
Do your agents consider you their carrier-of-choice because you make their job easier and help them succeed?  Or do they think you are hard to do business with, so you have to constantly press them for their quality submissions?
Are you leveraging your underwriting knowledge and best practices to write the best business at the best price?  Or are you just doing pretty well with what you have to work with? Do you even really know?
Modernizing and optimizing your process can transform your business.

• Because you help agents to be more productive in getting answers to their customers, more business will come in.
• Underwriters will be able to focus on underwriting and handle more submissions in less time with better quality. Yes, underwriters will be able to write more business – and better business – at the best price.
• Managers will finally be able to see across all lines of business, react in real-time, and deploy a true enterprise underwriting strategy.

These platforms are all within our reach today, but only if we are willing to transform how we process our business.
Stop looking at the underwriting process as just data entry for the policy administration system – it is a unique business process with a unique set of demands and goals.
Stop investing your energy and resources in small enhancements to the same constraining workflow – tantamount to “paving the cowpaths” – and start thinking differently about how you would process if you had that magic wand.
The best time to modernize and optimize is when it helps you lead, not when you are trying to catch up. The possibilities are here, now. And if you don’t seize them, your competition will. The first step is to define the business process you want. So get started – thinking, talking, planning, and acting.

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Edward Gray is the Director of Customer Solutions for FirstBest Systems in Lexington, MA, where he works with customers to develop a shared vision for how an underwriting management system can bring real-world productivity and quality benefits to the carrier’s internal and agency operations. Ed has more than twenty-five years of insurance expertise in Information Technology and Business Operations with carriers and brokers, including roles as CIO, COO, and Senior Vice President of Operations. He has extensive hands-on experience in system and business process architecture and re-engineering in policy administration, claims, billing, reinsurance, accounting, and management reporting areas, so he has seen what does (and doesn’t) deliver real value to the insurance organization. Ed would be happy to hear your thoughts on the underwriting process.