Some great feedback on my previous post – “Straight Through Processing & Underwriting – The Starting Point”.
Many thanks to those who responded with your comments and feedback.
In that post I stated: “STP helps to drive efficiency and consistency” throughout the life cycle of all policies and that insurers need to start with their underwriting process. Many of you posed the question “What about the new business process as well as workflow processing — why are these not part of the starting point well?” A+ – Congratulations – THEY ARE!!
Fact: Underwriting is a set of guidelines that determines the eligibility of a client to receive an insurer’s product. New business rules determine if the client meets the product’s prerequisites as defined by the insurer. One differs from the other, yet both compliment each other in the final decision process.
Fact: New business coming in the door for an insurance carrier starts the business process for new policies. It only makes sense then that this starting point for building a solid STP business models resides in both underwriting and new business processing. They support and complement each other hence the need for both to be worked concurrently. Supporting these two functions is a much needed workflow management process/system. All three business functions forms the foundation you need to continue to build your STP process.
Working extensively with our clients to forge a path to a full fledged STP business model, we begin building this foundation by reviewing and dissecting both their underwriting and new business processes. We also begin the much needed workflow analysis and build process.
Underwriting Guideline Review
The focus here is to concentrate on the underwriting guidelines that support each product within a given product portfolio. We review manual and automation processes. We determine what guidelines are consistent within the portfolio and what guidelines are unique to a specific product within the portfolio. Once we have a clear understanding and have the details we DOCUMENT! Documenting this process is no easy task and is often what prevents insurers from this review process.
New Business Rules Review
As with the underwriting guidelines, the focus here is on the new business rule sets that support each product within the portfolio. This tends to be more grueling since each product in the portfolio is unique. We look first for common business rules across all products in the portfolio, then determine what rules are unique by product. Again once we have a clear understanding and the details we DOCUMENT!
Often overlooked in the early stage by insurers is the need for a detailed review and possible re-alignment of workflow procedures. Workflow is what moves your policies through the new business and underwriting process and is critical to the success of your STP initiative. This step must occur concurrently with the underwriting and new business reviews.
Figure 1 below depicts the business process model that can be followed to develop that solid core foundation needed for your STP.
With that stated I hope this helps to address the questions and comments from my previous post. Now I must end with asking this question – if you have your core foundation what is your next step in the STP process? From my perspective the next step that I take with my clients is ……. to be continued….