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Benefits of Automated Insurance Underwriting

In this digital era and fast world, technological advancements are reshaping every industry across the globe. The insurance sector is no exception, as it embraces robotization to streamline its operations and deliver a better experience to its users. 

A recent study by Novarica proves that  85% of life insurers now have paperless underwriting processes and 77% of the insurers are using automated insurance underwriting methods to satisfy their clients. 

This is a remarkable transition in the insurance industry which makes all the processes fast and error-free.

In this article, we will discuss the advantages of automated insurance underwriting, and how automation is revolutionizing the way insurance services are provided to users. 

Also read: Benefits of Life Insurance

Streamlined and Efficient Process

The automated insurance underwriting process has vanished the traditionally laborious working methods which has undoubtedly decreased the manual process and made the insurance process even faster. 

Now, Insurance companies that are using digital software for insurance processing have pretty much faster turnaround times compared to traditional Insurance companies. In the past, sometimes as a customer, your work stops for an indefinite period without any reason if your file is stuck somewhere in the company.

Automated insurance processes have also streamlined the process by minimizing human errors and making the process even faster. I hope this will keep on growing by also minimizing its drawbacks.  

Also read: Impacts of Poor Risk Management

Enhanced Risk Assessment

Automated underwriting processors utilize big data and analytics to find out the potential risks we can face in insurance. Traditional underwriting depends upon limited data which may result in financial loss or something more disturbing. 

Automated insurance underwriting uses big data and advanced analytics which makes the results almost predictable and avoids customer loss by making personalized policies for any individual. 

In this way now insurance companies can identify high-risk and low-risk customers which helps them make fairer and more accurate offerings to all of their customers. 

It means automated insurance underwriting increases the overall risk assessment which is beneficial for both users as well as insurance companies to avoid any potential loss. 

Increased Customer Satisfaction

The basic reason for using automated underwriting is to improve customer experience and avoid traditional boring paperwork. automated insurance underwriting has made the application process very fast, convenient, and approachable for every customer as compared to traditional underwritings where customers had to wait for their application to process for a long time.  

As we have discussed earlier, modern underwritings can identify the high and low-risk profiles and then make personalized offers for each customer according to their profile status. Traditional insurance companies can’t afford personalized applications for every customer, they treat all of their customers in the same way. 

Transparency and Clarity in the automated underwriting process have also increased customer satisfaction increasing the revenue of insurance companies. Recent studies have proved that 77% of the total customers want to choose automated insurance services due to clarity and transparency in their process. 

Cost Savings for Insurance Companies

Insurance companies that are using automated underwriting have lowered operational costs which results in cost savings for these companies as well as for the customers. 

By using automated processing we can cut down a lot of time and money which were to be used on paperwork and workforce by optimizing the use of their workforce in other valuable tasks. 

Moreover, with better risk assessment, insurance companies can manage their risk exposure. This leads to reduced claim payouts and enhanced profitability, giving them a competitive advantage in the request. Adaptability and Scalability

Automated is not only a one-time solution for its customers as well as insurance companies, Rather it will keep on improving through the integration of modern-day technologies like Artificial intelligence and Machine learning. 

These modern technologies are always increasing the adaptability and scalability of these automated underwritings. It means these technologies will keep on improving according to customer needs to provide the best services to them. 

Insurance companies can easily scale up their strategies effortlessly to handle the increased amounts of applications. In this way, they can respond to adapt to the changing conditions of the market and customers’ expectations. 

Addressing Concerns and Challenges

As we know customers have to share their sensitive information with insurance companies and now companies must keep the data of their customers secure. 

Maintaining a human touch and providing customer support through humans is an essential aspect even with the use of automation. Offering access to human agents for inquiries and assistance ensures a balanced customer experience.


After doing all the research, my experience, and studying this topic, I have concluded that automated insurance underwriting has revolutionized the way insurance services are given to customers. 

It streamlines processes, enhances risk assessment, boosts customer satisfaction, reduces costs, ensures compliance, and embraces adaptability. 

As the technology keeps on improving, automated underwriting will also keep on improving to provide their customers with the best possible facilities they can offer. 

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


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