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The underwriting manual of the future

With the advent of a new decade it is always interesting to look into the future. We turn our thoughts to the trends and issues that will influence the development of the underwriting manual of the future.

Some of these trends might include:

  • Greater complexity of rating tables and a need for better navigation
  • More personalisation of both navigation and of content including the ability of local administrators to edit content
  • Use of calculators and worksheet wizards
  • Integration of the manual into other underwriting tools such as workbenches
  • The use of natural language processing and text mining of unstructured data to interpret or summarise electronic health records (EHRs) and attending physician’s statement (APS) information
  • The use of artificial intelligence and machine learning.

There appears to be a general trend for ratings in manuals to become more complex. There may be a greater desire for greater precision in the ratings and a need to better differentiate between good and bad risks, and ongoing in-depth research into medical conditions may identify new or more risk factors than previously. Or, more simply, the rating pages keep getting longer and longer as the number of additional risk factors grows and the risk classification method becomes more complicated.

So underwriters already under pressure to turn cases round more and more quickly will have less time to familiarise themselves with the contents of the manual and less time to correctly slot cases into complex classifications. Arguably, the risk of making errors increases. The manual of the future will have to employ smart design and navigation to increase productivity and maybe reduce the potential for mistakes.

To some degree the use of calculators and ‘flow chart’-type rating wizards aim to address these issues. They ensure that decisions on complex cases (such as cancer) cannot be underwritten unless all of the critical risk information has been put in. However, these tools can sometimes frustrate senior underwriters who feel that they are not able to use their judgment and experience: calculators are often black and white while underwriting cases can contain an element of grey. Mental health underwriting might be a good case in point, although we do hear that mental health calculators may be introduced to reduce subjectivity and ensure adherence to best practice. Greater consistency should of course be an ever more important objective in these days of increasing regulation. You can read more of our thoughts on the use of calculators here.

In the modern world a significant percentage of business will be processed by underwriting engines and with automation comes greater consistency. An underwriter’s view of a case these days will likely not be from a paper file but via some sort of workbench with assorted information being brought together to present a ‘one-stop shop’ of the case details such as:

  • Applicant disclosures
  • Lab test results and physical measurements
  • External data such as prescription histories
  • APS information or summarised APS information
  • Mortality scores or other data from external sources.

The impact of this is that the manual process needs to become slicker and we believe this will result in the need to integrate the functionality of the underwriting manual and the workbench.

Having this capability would appear to make a lot of sense but the integration could be on a number or levels. Possibilities include:

  • A simple link to the manual with single sign on
  • Deep linking to the relevant pages of the manual in relation to the medical conditions being underwritten
  • Automated presentation of the specific section of the manual based on the information provided to the workbench; where there are multiple risks then this may need to enable a holistic view of the case
  • Deeper analysis of the various sources of underwriting information referenced by the manual to suggest to the underwriter a case-specific decision; ultimately it may reference decisions made on similar cases assessed previously.

In summary we believe that technology trends will influence the next generation of underwriting manuals in general and our RiskApps product in particular – this project is already under way and we will keep you updated on our progress.