Improving performance in the area of new business and underwriting in today’s economic times is particularly important. Lower affordability on the part of customers is forcing many carriers to lower profit margins in middle market products – emphasizing the constraint to lower the cost to enable new business to come up. Speeding up the underwriting procedure is also important, since the longer it takes to complete the underwriting cycle for a new account, the higher the probability of the application being abandoned or retracted. Computerized abilities of current new business and underwriting systems are significantly more appealing since they allow insurers to more quickly assess risks and process new applications faster thus enabling them to lower the cost of issuing policies.
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 are not required to purchase new hardware, invest in costly software upgrades or incur exorbitant maintenance costs. They are able to share the costs of both the infrastructure and help desk amenities.
Across the industry, automated systems are delivering impressive benefits, including:
1. Faster cycle times – The SaaS alternative expedites the process of new applications. This is done by applying real-time validations. Also, it leads to efficient ordering as well as mechanized workflows, delivering faster close rates. By leveraging an existing infrastructure and out-of-the-box functionality carriers also 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 performance of up-coming business and their underwriting.
3. Cost Reduction – Software are also meaningfully reduced because of the Web-based distribution methods. The cloud enabled set-up cuts down wastage and brings economy in maintenance and operational costs. In addition, since the product pricing is subscription based, the insurer does not incur upfront license fees.
4. More Scalable – With the insurer growing, their products, markets and customers, the SaaS licensing product finds increasing usage automatically. It eliminates the need to make expensive additional purchases of hardware or deal with expensive software upgrades and maintenance costs. They subscribe to a shared infrastructure and a shared help desk service.
5. Better customer service – A suitable automated system improves the proficiency and flexibility in the business process and leads to higher quality service to producers as well as customers. The Web-based alternative also offers advanced usability characteristics in the application process.
SaaS provides insurers with a welcome alternative to buying, building and maintaining their own IT infrastructures which often require lengthy installation times and exponential costs. Today, they are able to subscribe to services built on a shared infrastructure via the Internet. This approach, also allows them to grow product lines, geographic markets and add customers as fast as needed without replacing costly infrastructure or adding expensive hard-to-find IT staff. A recent Forrester Research study of one thousand IT professionals revealed that IT managers also favor the move to the SaaS approach since the pricing based on subscription helps businesses keep their IT planned budget steady or even lower than had it been the case of homemade software.