Automation: it’s a buzzword no business can escape these days. Different forms of digital automation are being implemented across all industries. Insurance is no exception. Though this industry is often thought of as lagging behind others on digital technology, all insurers have applied some form of automation to areas like underwriting, claims handling and customer service. That has value for insurance customers and their brokers.For small and mid-sized businesses, automation in the form of digital underwriting makes more insurance products more readily available. Trade Credit or Accounts Receivable Insurance is a good example. This coverage was not historically accessible to smaller businesses. Underwriting such policies was time-intensive and costly. Yet many smaller businesses are exposed to insolvency, protracted default and political risks, which means the availability of the protection provided by accounts receivable insurance is important for them.
Enter digital underwriting. Digital underwriting is rapid underwriting undertaken by algorithms, and it allows insurers to offer more products to smaller businesses. At ReceivaSure, we have found digital underwriting helps brokers and their clients get answers faster. Brokers have told me they would rather get a quick “no” than a “no” weeks later, which is what this tool provides. The digital application includes several simple pre-qualifying questions for rapid flagging of eligibility/ineligibility. It is structured in such a way that it prequalifies businesses early in the application process. That way, the broker either gets that quick “no,” or the account is prequalified and should get a proposal with a high degree of certainty by completing the specific risk underwriting questions.
Typically, a non-binding indication of interest is generated in real time. If the terms appear attractive enough to secure a firm quote, the press of a button submits the proposal for digital risk underwriting. This typically results in a firm quote the next day for Domestic buyer programs and anywhere from one to seven days for Export, if there are several international buyers to be underwritten.At a time when we often hear about the negative sides of instantly accessible data, digital underwriting provides a counterpoint: Data is used transparently and maximized to benefit small businesses. Combined with direct billing, digital underwriting helps make the insurance purchasing process faster, renewals painless and mid-term policy service more streamlined and efficient for brokers and small business policyholders.