Ye Olde Insurance Policy

All buyers of insurance require evidence of their purchase whether they are a Fortune 500 company or an individual looking for personal lines cover.

Large clients have the resources to develop bespoke wordings tailored to their requirements. These have often been developed with their broker over many years and will include coverages designed to protect the company’s unique global operations.

Personal Lines business is far more of a commodity, with price being the determining factor for most buyers. The policy arrives pre-printed and is the same for all customers.

Between those two extremes is business that is not large enough to qualify for a team of dedicated wordings experts but too big to be served by an off-the-shelf insurance product. Whether described as Mid-Market, SME or Non Risk-Managed accounts, the production of their insurance policies still reflects many of the habits learned in the days of the typewriter.

The common practice, even today, is to establish a standard Wording that describes the general terms, coverages and exclusions for the class of cover being provided. This is then amended to the client’s needs by physically attaching endorsements that either extend or reduce cover. The resultant document is often confusing to the client, overly verbose and open to errors and omissions.

Market practitioners defend this process, however, claiming that it is easier to learn the coverages within a static wording than having to review documents from scratch for each client.

However, document automation technologies and some forward thinking underwriters are beginning to challenge this practice by providing insurance products designed to be precisely tailored to a client’s needs. Templates are being established that contain various permutations of cover, exclusions or other terms which assemble a quality client document by answering a series of questions in a web-based interview.

Not only are these documents clearer for the client to understand, better structured, more relevant and shorter, but the automation process enables them to be produced more consistently and accurately than before and in a fraction of the time.

Using insurance document automation tools, it is now possible to provide a quality, bespoke insurance product to all commercial buyers, large or small.

This post was authored by Martin Kett, Exari’s Vice-President of Insurance Client Development. Martin will be at both the RIMS Conference in Boston, MA this week and the AAMGA Annual Meeting in Palm Desert, CA next month, if you would like to learn more about insurance document automation.

Photo courtesy of greg.turner

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