Federato vs. Underwriting Workbench: How Are They Different?

What is an Underwriting Workbench?

An underwriting workbench is a piece of software commonly used as part of the underwriting workflow. Traditionally, underwriting workbenches have been used to automate some previously manual processes. For example, an underwriting workbench might extract data from an electronic form so that the underwriter doesn’t have to manually key it in.

Underwriting workbenches are often focused on trying to help an individual underwriter go through their process more efficiently, so that they can process a higher volume of submissions. Some underwriting workbenches also aim to offer decision support to help make it easier for underwriters to make risk decisions.

Underwriting workbenches are frequently positioned as a one-stop shop for everything an underwriter needs for their work. This doesn’t always pan out in reality, however, and many underwriters still have to deal with 10+ systems daily while using a workbench. 

What is a RiskOps Platform for Insurance?

Risk operations (RiskOps) is a set of practices, tools, and processes that help insurers achieve strategic portfolio objectives by providing underwriters with the context needed to make better decisions on each individual risk. Federato’s platform is designed to support RiskOps workflows in underwriting.

While RiskOps does improve underwriter efficiency, its scope is much broader than a conventional underwriting workbench. RiskOps focuses on an insurer’s portfolio as a whole. Rather than looking at submissions as individual, discrete transactions, like a workbench does, RiskOps considers how each of those transactions impacts the portfolio and its goals, and how individual underwriting actions can drive towards achieving those goals.

To support a RiskOps workflow, then, a platform needs to provide real-time insight into the current state of the portfolio, including current goals, progress towards objectives, and any areas for concern.

The 3 Main Functions of Underwriting Technology

Let’s take a look at how these concepts play out across the main functions of underwriting technology.

1. Underwriting Decision Support

Decision Support with an Underwriting Workbench

Decision support is meant to help underwriters arrive at the right decision faster. Many underwriting workbenches list this among their features. Since underwriting workbenches don’t focus on the full portfolio, however, the effectiveness of this guidance can be limited.

Underwriting workbenches can house static information about appetite, which is great for easy reference to the organization’s general goal. What it can’t do, however, is tell underwriters if the appetite has changed. This can cause problems as the team signs more business.

For example: say the underwriting team’s goal is to write $50M in business for certain restaurant types in a particular area. When a submission for that kind of restaurant comes up, the workbench can surface the goal and remind underwriters that this is one of the deals they’re supposed to go after.  What it can’t do, however, is keep track of how close the team is to that goal - or if they’ve already met it. Essentially, the workbench can only tell an underwriter if something was in appetite whenever the guidance was issued. This can lead to accumulation problems.

Another area where underwriting workbench decision support has traditionally fallen short is winnability. Quoting a risk requires a significant amount of effort from the underwriter, and there’s not much point in spending that effort if they have little-to-no chance of actually winning the business. Underwriting workbenches, with their focus on only part of the process, don’t usually have enough information to make accurate predictions on whether or not a deal is likely to close.

Decision Support with Federato

The RiskOps focus on the holistic portfolio means Federato’s platform is able to provide much more effective underwriting decision support than a traditional workbench. Federato keeps underwriters up-to-date on the current state of the platform, not just the initial objectives.

Going back to our earlier example: if the underwriting team’s goal is to write $50M for certain restaurants in specific areas, then the Federato platform will surface that goal for appropriate submissions. However, it will also surface current progress towards that goal, including whether it’s still relevant. In this case, that might mean flagging on an otherwise-promising submission that the team has already written $46M towards the goal - and so the $10M submission that the underwriter is considering is actually now out of appetite. 

This more expansive view of the business also enables Federato to more effectively evaluate the winnability of each submission. Besides just the submission data itself, the platform captures data on interactions between the underwriter, the broker, the account, and more, that is unique to each organization. This additional context means the Federato platform can offer winnability scores that are up to 10x more accurate than a traditional underwriting workbench.

2. Prioritizing Underwriting Submissions

Prioritizing Submissions with an Underwriting Workbench

With an underwriting workbench, prioritizing submissions that come in is generally left up to the underwriter. For most underwriters, this means defaulting to the first-in, first-out (FIFO) method of dealing with submissions. The underwriter reviews each submission in the order it arrives, and decides if it merits deeper consideration.

The problem with this method is that in order to get to a good submission, the underwriter first has to work through any not-so-good submissions that happened to come in first. This not only wastes underwriters’ valuable time, but also can lead to missing out on promising deals that simply took too long to rise to the top of the pile.

Prioritizing Submissions with Federato

The Federato platform leverages AI to evaluate all submissions against the organization’s specific appetite guidelines, and the current state of the portfolio. When a submission is received, the platform assigns it a priority based on both winnability and how well it fits the current appetite. Submissions that score high on both those metrics are flagged for the underwriter’s first attention.

The purpose is not to replace the underwriter’s judgement, but to cut out the tedium of wading through a high volume of submissions that are not necessarily relevant. By bringing the best deals in front of underwriters first, Federato allows them to focus their time on risk analysis rather than triage.

3. Increasing Underwriting Efficiency

Increasing Underwriting Efficiency with an Underwriting Workbench

Most underwriting workbenches aim to help boost underwriting efficiency by helping underwriters get through their workflow faster. To do this, the workbench usually tries to consolidate as many processes as it can into a single system, and reduce manual requirements wherever possible.

This can definitely help speed up an underwriter’s routine, especially compared to manual data entry. However, many underwriting workbenches fall short of their goal to be a one-stop shop. The number of third-party data sources available to underwriters has exploded in the last decade, and usually these tools need to be accessed outside of the workbench. Rather than being a time-saving consolidator, the underwriting workbench can easily end up as just one more screen to tab through.

Something else to consider around efficiency with an underwriting workbench is that while it can help an underwriter work through their process more quickly than they might otherwise, it doesn’t address fundamental problems with the process itself. If the underwriter is still following the same, inherently inefficient FIFO review process with no real insight into whether an account is winnable, then going through that workflow slightly faster is unlikely to make a significant difference in results.

Increasing Underwriting Efficiency with Federato

The Federato platform approaches efficiency from two directions. While it helps underwriters work more quickly by reducing time spent hunting for information or completing repetitive tasks, the bigger aim is to ensure underwriters are allocating their time to the right deals in the first place.

With Federato, underwriters are able to focus their attention on the most promising submissions. Since the platform automatically identifies submissions that best fit the organization’s current appetite and goals, and which are also most likely to bind, underwriters can jump straight into the best opportunities instead of going one-by-one to flag which are worth pursuing.

Counterintuitively, underwriters often touch fewer submissions with Federato - but since the majority of those submissions are high-appetite and high-winnability, they issue more quotes and win a higher percentage of deals. Underwriting efficiency increases not through doing the same thing faster, but by focusing in the right areas and enabling underwriters to do more of what they do best - analyzing risks and determining which business to quote.

Once underwriters get into their risk analysis, the Federato platform also enables them to work more quickly. The platform’s federated data graph enables it to proactively pull in data from all of an insurer’s external and internal data sources, creating a single pane of glass for underwriting. Underwriters that work through Federato average 87% fewer systems used, with 70% less time spent looking for guidance. 

Replace your Underwriting Workbench with Federato

While Federato’s RiskOps platform and a traditional underwriting workbench may seem to share similar functions at first glance, the two systems are actually quite different. Underwriting workbenches tend to be designed for older workflows, with limited decision support and prioritization, which impacts efficiency gains. 

The Federato RiskOps platform provides meaningful decision support and prioritization driven by real-time insights into the current state of the portfolio, and improves efficiency by helping underwriters focus their valuable time on the most profitable, winnable deals.

Learn more about the Federato platform with a self-guided product tour, or connect with us for a live demo today.