Four Key Benefits of STP in P&C Underwriting  

Traditional underwriting can be bogged down by manual tasks and labor-intensive data entry, which slows operations and hampers efficiency. Straight-Through Processing (STP) offers an innovative solution for Property & Casualty (P&C) insurers, automating the entire underwriting process—from data collection and risk assessment to policy issue—helping insurers streamline operations and improve accuracy.  

According to a McKinsey report, 95% of P&C policies are expected to go through STP in the future. These numbers are expected to grow even further with advancements in AI and machine learning technologies. 

Here are four ways STP can streamline your underwriting process:  

1. Reduce Manual Intervention  

One of the major challenges for P&C insurers is the manual intervention required during the underwriting process. Underwriters often spend valuable time gathering, verifying, and entering data across multiple systems. This not only delays policy issuance but also heightens the risk of human error, potentially leading to inaccurate risk assessments and poor underwriting decisions. 

 STP addresses this by significantly reducing the need for manual data entry and review. Through automated data collection and validation, STP enables underwriters to focus on more complex cases that require their expertise, rather than routine tasks. This shift enhances efficiency, reduces processing time, and accelerates policy issuance —critical factors for improving customer satisfaction and retention. 

 2. Assess Risk  

Underwriting practices often result in inconsistent risk assessments as different underwriters may handle similar applications in varying ways. These inconsistencies can lead to significant discrepancies in pricing and coverage terms, which, over time, can affect an insurer’s profitability and market competitiveness.  

STP helps standardize the risk assessment process by using pre-defined rules and advanced algorithms to evaluate risk factors. With the integration of data and analytics, insurers can ensure that all applications are assessed according to the same criteria. This reduces oversight and provides a more accurate analysis of risk, leading to better pricing and a more consistent underwriting approach. This also levels the playing field for the insured, who may be subject to human biases. 

3. Reduce Operating Costs 

The operating costs associated with traditional underwriting are often higher than anticipated. When underwriters are faced with repetitive tasks, such as entering information into multiple systems or cross-referencing data sources, the cost per policy can skyrocket. This inefficiency reduces profit margins and prevents insurers from scaling their operations effectively. 

By implementing STP, P&C insurers can streamline workflows and automate routine tasks, significantly lowering administrative overhead. This results in a leaner operation that can handle a higher volume of policies without increasing headcount. In addition, STP further reduces cost savings by lowering error rates and spending fewer resources on correcting mistakes.

4. Real-Time Decision Making 

In today’s fast-paced insurance market, real-time decision making is essential for forward-thinking insurers. Yet many P&C insurers rely on outdated systems that lack the agility to process applications quickly and provide instant feedback to agents and brokers. This can trigger delays in quoting, which can frustrate customers and result in lost business. 

Insurance STP enables real-time data analysis and decision making. With automated workflows and real-time integrations such as AI and machine learning, underwriters can instantly access up-to-date information on applicants and claims history, allowing them to make fast, informed decisions. This not only boosts turnaround times but also increases customer satisfaction. 

The Final Word 

Straight-Through Processing (STP) is more than just an innovation — it’s a shift for P&C insurers seeking to overcome the inefficiencies and inconsistencies of traditional underwriting. By automating routine tasks, improving risk assessment accuracy, and enabling real-time decision making, insurance STP helps transform underwriting into a streamlined, value-generating asset. 

Sapiens understands the complexities involved in transitioning to STP and offers tailored solutions designed to meet the unique needs of P&C insurers. Whether you’re looking to enhance underwriting speed, reduce operational costs, or improve decision making accuracy, our platform can help you achieve true straight-through processing and gain a competitive edge in the marketplace.  

Contact us to learn more!