Benefits of AI in insurance underwriting
Iryna Kravchenko Iryna KravchenkoChief Editor

Benefits of artificial intelligence in insurance underwriting 

Digital transformation of the insurance industry is progressing rapidly, revolutionizing the field with cutting-edge innovations and custom insurtech products. Among various IT advancements, artificial intelligence technology is a disruptive game-changer that penetrates an ever-widening circle of insurance pipeline activities. The use cases of artificial intelligence in insurance sector cover such shop floor processes as claims management, fraud detection, data analytics, and more. Another niche workflow where AI and insurance make a perfect match is underwriting.  

Let’s find out why manual underwriting is inefficient and how using AI in insurance underwriting can give companies that embrace it a competitive edge. 

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The downsides of manual underwriting made plain

The insurance underwriting system is the bedrock of the domain. Agents perform a comprehensive risk assessment to understand whether the organization will insure a person’s life, health, property, etc. If the game is worth the candle, underwriters determine the policy’s price.  

Manual underwriting disadvantages

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Manual underwriting disadvantages

For many generations of insurers, this job has totally depended on their understanding and gut feeling. Acting on a hunch and manually sifting through client data doesn’t work today. The exponential growth of the customer base and the need to analyze tons of information manifest the inadequacy of hand-underwriting.  

What are the greatest shortcomings of manual underwriting technology? 

Because of all the inadequacies of manual processes in this field, employees of companies that don’t leverage AI for insurance underwriting spend 40% of their working time on non-core activities, which is likely to cost organizations from $85 to $160 billion within the next three years as an efficiency loss. If you don’t relish the idea of such huge financial setbacks, you have no choice but to implement artificial intelligence in insurance software honed for underwriting.  

You might be interested in reading our article “Insurance analytics and artificial intelligence”

Benefits of artificial intelligence in insurance underwriting

As a seasoned IT company specializing in developing underwriting solutions, DICEUS realizes that AI is used in insurance underwriting in three ways. First, it can analyze loss statistics for various threat vectors. Second, it can calculate a median risk score. Third, it can enable agents to apply different pricing scales to those use cases that are below or above a definite score. If a software solution is equipped with the necessary features, it will usher in the following perks for the organization that utilizes AI in insurance underwriting.  

Benefits of AI in insurance underwriting

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Benefits of AI in insurance underwriting

Given the specifics of the niche, you can make the most of the AI-driven underwriting software only if you hire a competent vendor to develop and implement it. DICEUS has profound industry competence and technical skills to deliver a high-end AI underwriting product of any scope and complexity. Contact us to revolutionize your underwriting routine and take one more step towards digitalizing your insurance business.  

Related article: “How to build insurance policy management software: 5 key tips” 

To sum it up

Artificial intelligence in insurance industry has become a powerful driver of revolutionary transformations that are going on at a tremendous pace. Among the numerous use cases this technology has in the realm, employing it for the development of underwriting software is one of the mainstream trends nowadays.  

When performed manually, underwriting was a complex and time-consuming process that required enormous personnel effort. However, errors, inaccuracies, and fraudulent activities could not be avoided, resulting in financial loss and customer churn.  

Artificial intelligence allows insurers to minimize mistakes, solve unstructured data problems, mitigate potential risks, prevent fraud, improve operational efficiency, optimize price setting, and augment customer satisfaction. You can enjoy these boons by commissioning a bespoke AI-driven underwriting tool from a seasoned high-tech vendor with profound niche expertise. 


How does AI-powered risk evaluation contribute to innovation in insurance underwriting? 

AI-driven risk assessment routines analyze historical data to detect patterns and trends that may escape the attention of human personnel. Using this information as a benchmark, insurance companies onboard specialized software that employs more accurate risk assessment models to modify policy pricing, reduce loss ratios, and implement sophisticated risk management strategies. 

What role does machine intelligence play in the efficient underwriting process?

By embracing AI-powered underwriting tools, insurance organizations can streamline and facilitate their internal pipeline, where manual labor is kept to a minimum, all operations proceed quickly and accurately, errors are excluded, and the clientele enjoys the best-in-class customer experience. All these boons translate into more significant revenues for companies.  

What are the advantages of automated underwriting with artificial intelligence, and what considerations should be kept in mind? 

Automating the underwriting routine allows insurers to minimize paperwork, accelerate shop floor procedures, avoid errors and inaccuracies, forestall and ward off risks, and provide a superb customer experience. However, while harnessing automation in underwriting, you should ensure the utmost security of your software, adhere to regulatory compliance, and balance costs with benefits.  

What are the advantages of AI-powered enhancement in risk assessment for underwriting, and how is it implemented? 

Since AI-fueled underwriting solutions can draw relevant data from multiple sources, they allow insurers to create a comprehensive picture of their potential clients. Armed with such dossiers, agents can better assess the risks of cooperation with these people and mitigate them by modifying policy pricing and premium conditions correspondingly. 

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