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services the new business service providers like the data -entry outsourcing
agencies etc. all pose a great challenge at the risk evaluation /underwriting
process. The regulators (IRDA) have recommended certain prudent risk 2ol
measures for insurance business, which would ensure that certain prudent risks
are either eliminated or to a large extent minimized.

 Stiff competition amongst the insurers to make their products easy to market, is
necessitating customized underwriting rules to make them customer friendly.
This too poses a challenge at the pricing stage of product development and the
containment of risks of early claims. Enhancement of c-medical limits may
sometimes lead to insuring bad lives at inadequate premium rates. It is good to
offer lower premiums to good risks and to e adequately for sub-standard risks but
offering very high non-medical as puts severe constraints on these risk control
mechanisms.
 Automation of the underwriting process carries an inherent challenge of
managing risks through the system with minimal human intervention in the
process involved at the policy issue stage. Automation of underwriting helps in
ensuring faster turn-around times and helps reduce costs of plowing large teams
for underwriting large business volumes. However complexity of underwriting
rules for multiple products based on ruled criteria could throw up technical errors
system-related errors which easily pass through the validation rules and emanate
in the form of huge uncial risks. Hence. extensive validation tests and reporting
along with a, :,se-monitoring of the processes is inevitable
 Availability of trained underwriters is an also a challenge world over.

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