Commonwealth Mortgages Assurance Co. in Philadelphia has complete the first phase of an artificial intelligence system that emulates human judgment in the underwriting of mortgage loan insurance.
The system, called Judgment Processing, was created by Cybertek-Cogensys of Dallas.
Judgment Processing captures data and then applies the decision-making abilities of an organization's best experts, which have been programmed into the system.
With $230 million in assets, Commonwealth Mortgage is the fifth-largest U.S. provider of mortgage insurance.
More than 4,000 banks, thrift institutions, credit unions insure residential loans through Commonwealth. Its brokers process more than 10,000 loans a month.
Allows More Time for Clients
According to Commonwealth's president and chief executive officer, James C. Miller, the company decided to purchase Judgment Processing to improve productivity and enable underwriters to spend more time with customers.
"The system assists with the more routine aspects of risk analysis," said Mr. Miller. "This frees the underwriter to focus on areas that may need his or her direct attention."
One of the company's top underwriters is currently working with Cybertek-Cogensys application specialists, helping them define the problems that underwriters typically face.
"There may be 30 areas that need to be evaluated in the course of underwriting, from creditworthiness to property evaluation," Mr. Miller said. "Under these categories, more questions will invariably arise."
These underwriter also answers the key questions and gives them an appropriate weight for the analysis. For example, if an applicant's length of employment is less than three months, this factor will receive a lower score than if the person had been at the same job for five years.
The software then is "taught" to respond to the questions. Mr. Miller said that Commonwealth is running test applications through the software to see if the product behaves as an underwriter would.
The underwriter, meanwhile, continues to refine the questions and answers.
For Commonwealth, Judgment Processing is part of a long-term commitment to the use of artificial intelligence and other advanced technology tools.
Commonwealth first began using simple rule-based systems in 1986 to help improve the underwriting process and later to assist the company's default analysts in prioritizing accounts.
Mr. Miller said he expects the new Cybertek-Cogensys software to be fully operational by the end of next year.
Ms. Sullivan is a freelance writer based in New York.