Pegasystems[NASDAQ:PEGA]: Intelligent Automation for Insurance Underwriting

CIO VendorAlan Trefler, Founder & CEO The underwriting process of a carrier must strike the right balance among dynamic business objectives including new customer acquisition and intelligent risk management. However, many daunting challenges associated with creating acquisition and underwriting processes that quickly convert prospects into customers, and also closely managing risks and adhering to corporate and regulatory requirements often disturb the structural growth of insurers.

Whether it’s speed to market, underwriting consistency, or improving hit ratios or reducing expenses, all insurers need a flexible underwriting environment that can easily respond to market changes, improve results, increase customer satisfaction and retention, and bring together process and decision-based technology to create a flexible, reusable underwriting environment. Pegasystems makes this possible. “We have developed an underwriting application that will improve consistency, optimize portfolio management, and ultimately lead to higher profits with lower risks. This new and unified platform will make a significant difference for commercial underwriters looking to strengthen both their top and bottom lines,” states Alan Trefler, CEO, Pegasystems.

"At a time when customer demands are reaching new heights, we increasingly engage with our clients to help businesses transform to meet these challenges in new ways"

As a top-notch provider of business process management and CRM solutions, Pegasystems delivers underwriting software solutions that help insurers efficiently convert prospects into customers, while closely managing risks and ensuring compliance with evolving corporate policies and regulatory requirements. The firm delivers insurance underwriting software solutions that streamline and optimize the customer on-boarding process, to the benefit of both the insurer and the customers.

The Quandary Solvers

According to Trefler, successful commercial underwriting requires the ability to model complex business logic to drive data validations, guide process steps, manage authority levels, flag alerts, calculate values, and even make context-driven recommendations at various points in the process. Pega’s Commercial Lines Underwriting application—built on Pega 7 platform—is designed to help carriers improve their underwriting quality and consistency by reducing operating expenses and capitalizing new market opportunities.

Customer engagement and simplification is exactly what we do and we do it in a way that’s enormously empowering and really brings better capabilities

Pega 7’s proven scalability ensures the application to run across the volume of users and variations in business lines, geographies, and channels that today’s organizations demand. With the firm’s unified offering, the group carriers can operationalize data analytics to execute data-driven strategies in line with profitability measures and targeted growth. The new application supports dynamic case management, which automates underwriting processes, improves underwriter collaboration, and bridges technical silos.

For instance, AEGIS Insurance Services, a global insurance firm based in NJ, was looking for an underwriting platform suitable for today’s environment as their legacy systems did not meet the demands of their business. AEGIS approached Pegasystems which successfully modernized their underwriting system—right from quoting, rating to binding and endorsements. This transformation resulted in newfound simplified and streamlined infrastructure and AEGIS is now able to gain operational efficiencies and reduce maintenance costs. “At a time when customer demands are reaching new heights, we increasingly engage with our clients to help businesses transform to meet these challenges in new ways—offering a clear path in preparing them for the journey,” point out Trefler.

Improving Underwriter’s Productivity

Pega takes a “lifecycle approach” to underwriting that allows insurers to control and expedite the underwriting process across their organizations. The firm doesn’t remove the underwriter from the process, but optimizes the amount of resource that is needed based on the product, line of business, and complexity of each transaction.

Furthermore, Pega platform’s dynamic case management feature guides underwriters, ensuring compliance and providing end-to-end visibility into all facets of the underwriting process. Insurers can review the status of applications, quotes, and policies in real-time and know where additional work is needed at any point in the lifecycle. This consolidated view of work-in-process also assists insurers to manage, underwrite, and price applications with greater detail at the customer level. Pega’s reusable underwriting foundation that simplifies and streamlines submissions, accommodates unique requirements by line of business, geography or any other business factor and delivers the agility needed to rapidly adapt business processes to changes in market and regulatory conditions.

They further accelerate the deployment of enhanced underwriting functionalities across market segments and enables insurance carriers to rapidly configure, deploy, and re-use underwriting best practices that carries delivery time, improves quality, and lowers development costs. Moreover, with Pega, insurers can leverage existing technology and eliminate redundancy with fast, easy, and secure integration within enterprise systems ameliorating every underwriter to execute the best, improving underwriter’s productivity. Pega modernizes underwriting environment and improves the performance of every underwriter with an intuitive, easy-to-use underwriting desktop. It reduces ramp-up time for new underwriters and optimizes efficiency for seasoned veterans. This allows carriers to institutionalize underwriting knowledge and best practices across the enterprise, making use of embedded rules and guided processes to eliminate error-prone manual processes.

Concomitantly, the firm brings together process and decision-based technology to create a flexible, reusable underwriting environment to help carriers in a more efficient way, maximizing the potential impact. Pega’s build-once-and-reuse-everywhere capabilities allow insurers to embed underwriting in solutions leveraged by agents, call centers, and other channels—including social channels and mobile devices—without channel-specific coding. While, standards-based integration provides quick, seamless connection to legacy systems, familiar office tools make it easy for underwriting product managers, actuarial, and business analysts to update rules and other underwriting/pricing elements without writing any code.

Courage is Money!

Pegasystems was bootstrapped from the beginning and never took on outside investors—a fact about that Trefler is especially proud of. “We went public in the '90s and we've now got a couple of hundred million dollars of cash in the bank. So we’re well financed at this stage. But we really built this company from scratch. We’re one of the few companies that customers can have confidence in that they are not going to wake up tomorrow and find that we’re part of Oracle.”

Born into an entrepreneurial family, Trefler grew up watching his father running a small business, worrying about payroll and things. To keep the business afloat, for him “courage” was all the money he had. “I think that was a pretty good introduction, obviously at a very small scale, to run a business. That was part of my blood,” says Trefler.

Today, Trefler believes that there is an industrial revolution that has come to software and it’s got to be around rethinking technology so that the business people can be more involved in and have more control, and Pega’s best days are ahead of it. “When I saw a need in the industry that was not being met, stepping out of a big company and actually creating a firm to go after it just seemed like a very natural thing to do. Historically, we’ve focused on the largest and most sophisticated customers because we wanted to make sure that our software was rich enough to handle their challenges. And now that’s been proven, we can bring a lot of the same capability to what is, for us, a much larger market. That’s our goal for the next 50 years".