10 Things You Should Insist Your InsurTec Vendor Consider

Are you thinking about purchasing or constructing your own rate binding initial system? If that's the case, it's essential to consider several factors, or ensure that your vendor takes them into account, for achieving successful long-term outcomes.

1. Incorporate Advanced Rate Dating for New and Renewal Business: It's crucial to implement a sophisticated rate dating mechanism within your policy management system that accommodates both new business and renewals. Underwriters often apply different rating increases for new policies compared to renewals, reflecting strategic decisions or regulatory requirements. Therefore, your system must differentiate between these two scenarios, ensuring that it applies the correct rate set based on the policy's original effective date, whether it's a new issuance or a renewal. Additionally, for endorsements processed months down the line, the system should automatically reference the appropriate rate table that was in effect either at the policy's inception or renewal. This capability ensures that all transactions, regardless of their timing, are calculated using the accurate rates, maintaining accuracy in pricing across the policy lifecycle.

2. Streamline Database Design Considering Insurance Policy Complexity: Insurance policies are inherently complex and somewhat deceptive in their data structure, requiring a nuanced approach to database design. Focus on maintaining a streamlined policy table that holds only immutable information such as the effective date, original expiration date, policy number, carrier, and broker ID. Given the fluid nature of many policy details—from the insured's name and address to coverage amounts—these variables should be allocated to interconnected tables designed to accommodate change. This strategic separation not only simplifies the management of dynamic policy elements but also ensures efficient processing of endorsements and premium audits. By acknowledging the intricate nature of insurance policies from the outset, your database architecture can more effectively handle the peculiarities of insurance data, facilitating smoother operations and updates

3. Designing an Online Rater for Efficiency and Broker Use: In creating an online rater, it's important to differentiate the user experience based on the audience. While a step-by-step narrative format may engage direct consumers effectively, this approach can become cumbersome for brokers who often require a more streamlined process. Although aesthetically pleasing interfaces may initially seem appealing and perform well in user testing with consumers, the practical, day-to-day use by retail brokers demands a different design philosophy. For brokers, time is of the essence, and a more concise, easily navigable interface can significantly enhance their productivity. This necessitates a departure from the consumer-focused A/B testing model, moving towards a design that prioritizes efficiency and ease of use for professional users. By tailoring the online rater to meet the specific needs of brokers, insurers can ensure a smoother, more efficient process that respects the unique demands of their work.

4. Empower Underwriters with System Flexibility: It's crucial to design your system with the understanding that underwriters should not be constrained by rigid system requirements. Underwriters, by the nature of their role, must have the capacity to override system-generated decisions to account for the nuanced and complex realities of underwriting. While the system can provide warnings or suggestions, ultimate control should rest with the underwriters, possibly with oversight mechanisms involving senior management for certain types of overrides. This approach prevents operational inefficiencies, such as the inability to issue a policy due to data discrepancies or uncertainties (e.g., confusion between an S corporation and a C corporation leading to a significant policy issuance delay). Allowing underwriters the flexibility to exercise their judgement ensures that the system supports, rather than hinders, the underwriting process.

5. Implement Comprehensive Tracking for Enhanced Efficiency: Ensuring that your system includes robust tracking capabilities is essential for optimizing operations. It's important to monitor and analyze the time it takes for underwriters and brokers to complete various tasks, from rating and binding to issuing policies. Despite many systems claiming operational efficiencies, few can quantify the actual time savings achieved. By capturing detailed metrics on the duration of each process, you can identify areas for improvement, assess the efficiency of different brokers, lines of business, states, or underwriters, and make informed decisions to enhance productivity. This data-driven approach allows for targeted optimizations, ensuring that your system not only claims efficiency but also delivers measurable results.

6. Streamline Online Rate Indications with a Unified Form: To optimize efficiency and reduce development overhead, enable brokers to conduct online rate indications using the same form utilized by underwriters. This unified approach simplifies system maintenance and the ongoing development of the rating tool by minimizing the need for multiple versions of the same form. Incorporate intelligent features into your user interface that recognize the role of the individual accessing the form, such as a broker or an underwriter, and automatically adjust the visibility of specific fields accordingly. This ensures that brokers are presented only with the fields relevant to their tasks, safeguarding sensitive options like "discretionary underwriting credit" from unauthorized access. Such a design not only streamlines the rating process but also enhances security and role-appropriate access within the system.

7. Maintain Comprehensive Logs for All API Interactions: It is imperative to record every interaction your system has with external vendors through APIs. This detailed logging is crucial for accountability and troubleshooting, especially in situations where disputes arise over the functionality or performance issues. Without concrete logs, it becomes challenging to identify the source of a problem when a vendor claims no fault. By having a complete record of all API transactions, you can swiftly pinpoint the issue, provide evidence in discussions, and ensure that responsibilities are clearly defined. This approach not only streamlines resolution processes but also strengthens your position in negotiations and technical discussions with vendors, ensuring that your underwriting and corporate users face minimal disruptions.

8.Streamline Data Collection for Rate Quotations: When designing your system's interface for brokers to obtain rate quotes, ensure that you only require the essential information necessary for rate calculation. Avoid overburdening brokers with extraneous questions that do not directly impact the rate determination. Organize the user interface to clearly separate the data collection for rate calculation from the information needed for underwriting purposes. This approach respects the broker's time and effort, focusing on efficiency and convenience. For instance, the mailing address of the mortgage holder, while potentially relevant for underwriting, should not be a prerequisite for generating a rate quote. By streamlining the data collection process in this way, you make it easier for brokers to use your system, thereby enhancing their user experience and satisfaction

9. Empower Underwriters with Access Control Capabilities: Grant underwriters the ability to directly manage system access, enabling them to activate or deactivate access for individual agents or entire agencies as needed. This feature is particularly crucial in urgent situations, such as when an agency falls behind on payments or appears to be transferring a significant volume of business away under questionable circumstances. The flexibility for underwriters to make immediate adjustments without waiting for IT intervention can prevent potential financial losses and operational disruptions. By providing underwriters with this level of control, you ensure that they have the necessary tools to maintain the integrity of the system and protect the company's interests, especially during critical moments.

10. Maximize Self-Service Functionality for Operational Efficiency: It's essential to design your system to be as self-sufficient as possible, minimizing the need for manual intervention by IT staff for routine maintenance tasks. A service provider's value should not be measured by their capacity to perform such tasks, but rather by their ability to maintain a system that empowers users to manage their own needs effectively. Enable underwriters to independently update rates, forms, and agency information, as well as to have the authority to deactivate specific programs in response to emergent situations, such as an impending hurricane. This approach not only enhances the system's responsiveness to real-time conditions but also frees up your IT team to focus on more strategic initiatives, thereby optimizing overall operational efficiency and responsiveness.