Why might an insurer implement a "surveillance plan"?

An insurer might implement a "surveillance plan" primarily to enhance underwriting accuracy for high-risk individuals. This is crucial because underwriting involves assessing the risk associated with insuring an individual. High-risk applicants may present additional complexities that require more thorough investigation and monitoring to ensure that the insurer accurately understands the potential liabilities.

Surveillance plans can involve gathering additional information, monitoring activities, or verifying claims and health status. This process enables underwriters to make more informed decisions regarding coverage, premium pricing, and policy conditions. By ensuring that all relevant data related to high-risk individuals is considered, insurers can better manage their risk and reduce the likelihood of unexpected losses.

Other options, while they may have merit in different contexts, do not specifically align with the primary purpose of implementing a surveillance plan in underwriting. For instance, reducing operational costs or simplifying claims processing are outcomes that could arise from more efficient practices but do not relate directly to the enhancement of underwriting accuracy. Similarly, increasing customer satisfaction is an important goal in the broader context of insurance operations but is not a direct aim of surveillance in underwriting.