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From Vizuri's Experts

Automate Insurance Underwriting with Case Management and Rules

While insurance companies strive for streamlined business workflows, the reality is that they often come up short. Of course, workflows are often slowed by complex decision-making requirements, and further delayed by time-consuming manual tasks. At the same time, human processes at the policy decision level affect the uniformity of those decisions, and unpredictability of risks can uproot whole workflow management processes.

We will take a closer look at how case management and rules-based decision management can help insurers face these challenges and improve their workflows.

First of all, what is case management?

To define case management, let’s start with the definition of business process management (BPM). BPM is a management practice for automating a sequential set of tasks that are repeatable and have a common pattern.

To effectively use BPM, the components of the task sequence must be very predictable and represent an end-to-end flow of work and data. This results in clearly defined paths that lead to a business goal.

Case management is an extension of BPM and allows for the management of adaptable and composable business processes. It recognizes that many real-world applications cannot be described completely from start to finish in a predictable manner.

Case management provides problem resolution for non-repeatable, unpredictable, or ad hoc processes. In essence, it manages one-off situations where the process cannot be predicted in advance. It usually consists of loosely coupled process fragments that can be connected directly or indirectly to lead to certain milestones (KPIs) and ultimately a business goal. The process is managed dynamically in response to changes that occur during run time.

Process fragments flow together to result in policy decisions, leading into different milestones. Tasks and sub processes can be dynamically removed, replaced, or relocated at any point to change the overall process and reflect new points of control, new risk thresholds, and to collect new and changing information to inform risk rating.

Microservices facilitate the loose coupling and composable nature of process fragments.

Applications have to be developed, tested, and released faster than ever before. Methodologies such as Agile and DevOps help break down the code into deliverable sizes to help speed up teams’ sprints through features and new services. This allowed developers and architects to reimagine their application design — and that has led to a natural, incremental introduction of microservices.

Microservices directly facilitate case management by breaking down a monolithic application into individual functions that can be used and manipulated both easily and independently of one another. Without this flexibility, case management would not be possible as business rules would remain locked in place and only usable in very specific, planned-out circumstances.

In addition to facilitating case management, microservices produce many benefits for a future-minded insurer:

  • They allow for instant auto-scaling of business rules.
  • They facilitate integration of new tech offerings.
  • They can easily integrate into existing agency management systems.
  • They can provide support to online third-party data providers, such as MIB, DMV, MVR, etc.

See the illustration below for a representation of how microservices operate to feed into multiple processes behind one UI, as opposed to a monolithic application that can only facilitate a single, predetermined process.


Read more about how microservices architectures can future-proof insurers: Modernizing Core Insurance Services – A CIO’s Dilemma

Fine tune business rules with A/B testing.

A/B testing, also known as split testing, allows the use of the same data set to simulate multiple different outcomes. It can be used to fine tune business rules, such as risk thresholds, to produce the most desired outcome/results. However, this would be impossible to accomplish if the rules were embedded in an application (unable to easily manipulate them) or spread over multiple systems and databases (inaccessible).

To conduct effective A/B testing, a microservices architecture must come first.

Incorporate rules-based decision management to automate policy decision making.

With the introduction of automated decision technology based on decision logic drawn from rules, compliance measures and determination of policy eligibility can become largely automated. This consistent use of rules helps to control risk.

Furthermore, information collection and data validation steps via dynamic questionnaire can be introduced along the way to continually improve and inform decisions, again, without laying the burden of collection on underwriters or agents. Customers also benefit from an improved experience with much faster turnaround times.

By using decisions AI based on rules, decisions are fully traceable, meaning that the reasons for why a decision was made are completely transparent. This allows for easier auditing with rules immediately available in human language, not buried in code or complex algorithms. 

Read more about business rules and knowledge management: Knowledge Management: Creating the Engine for Transformation

Piecing together the big picture.

To review, case management, as an extension of business process management, contributes to insurers’ future-proofing efforts by predicting unpredictability and treating each case as potentially different from those that came before it. To accommodate this, subprocesses remain loosely coupled and able to easily move, change, and be replaced.

However, to facilitate this loose coupling, computing based on individual functions, not monolithic applications must precede it. This is where a microservices architecture comes in.

Microservices also allow for A/B testing where business rules can be tested against one another to come up with the optimal combination that balances risk and revenue. Decision management systems and rules-based AI introduce automation from policy application to approval/denial notifications, freeing underwriters to personally handle the more nuanced policy processes that demand their attention.

Combining case management technologies with rules brings both agility in the face of changing risks and the response to evolving customer demand that will keep insurers competitive. Interested in how Vizuri brings this to life for customers? See our brief on our underwriting solution, based on Red Hat open source technologies, and reach out anytime if you have any questions.

Ben-Johan van der Walt

Ben-Johan van der Walt is a Software Architect/Engineer with over 20 years of experience leading successful projects of various sizes and scopes. He is a seasoned professional, with outstanding project planning, execution, mentoring and support skills. He is always ready for a challenge.