Let's Talk Underwriting Productivity

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An underwriter’s job (simply put) is to examine the risk profile of a customer to determine whether the policy should be issued and whether there are changes to make depending on the risk assessment. It used to be a lot of paperwork, entering data, spreadsheets, etc… Nowadays, the keywords in underwriting are: Faster and Better. Faster, because the end-customer doesn’t want to deal with a long process of waiting or back-and-forth traffic, and also “time is money”. Better, because there is so much data capabilities and technology available right now, we need to find a better way of doing things, and also better means more profitable! 

It is clear from the outset that the potential of AI has been discussed in insurance for many years, as it allows insurers to complete more than half of all submission intakes before they even reach an underwriter. AI makes it unnecessary for the underwriter to sift through multiple documents to manually gather the data and insights needed to assess and price risk. Instead, machines read and extract insurance - specific data points - and understand information about the risk profile of a customer, the risks of a particular product and the risk appetite.

Working together with underwriters and other humans, artificial intelligence can help reduce loss ratios, improve communication with customers and brokers, and create so many efficiencies in the underwriting process by implementing AI powered workflows. Customers want definitely better experience, faster service and cost-effective insurance solutions; and the use of technology seems to be the only way to achieve that combination. 

These automated workflows improve the underwriting productivity by using algorithms that take into account a lot of data points at once, helping underwriters analyze incredible amounts of information, finding red flags, and helping make more accurate decisions. This approach definitely brings productivity to the underwriting process and potentially reduces costs and the risk of human error, it would be a big mistake to think it replaces the underwriters.

Human underwriters are not expected to be replaced, and their expertise and experience are still needed in many cases. The future underwriters can expect to work with AI systems to ensure that risks are accurately measured and assessed while working with them on risk management and ensuring that they are accurate. This suggests that there are ways for underwriters to grasp the full value of this new tech capabilities. However, there will also be a need to develop new skills, as underwriters "interaction with automated AI systems and old skills could become increasingly obsolete. 

Generally speaking, as companies deploy their work -automating technologies and introducing machine intelligence to their organizations, TALENT is one of the limiting factors in translating innovation into real business benefits. While everyone is focusing on designers, developers, and data scientists today, companies need to explore what new roles DIGITAL DISRUPTORS could play. Insurers are no different, and underwriters should be the center of attention to start, if you ask me.  

The future of high-end underwriting lies in figuring out how to best combine human intuition and expertise with machine processing capabilities. And when I don’t mean only “rapid automation” when I say machine capabilities. I mean automation, accessing and using new data fields, changing our pricing models with new data points, creating new risk assessment tools, using images and extracting data from them, creating such processes where the end-customer doesn’t need to answer 50 questions, exploring innovative technologies… 

Combining human underwriters with smart technology can improve the process by comparing individual accounts with peers, companies, and carrier portfolios through comparative analysis to create a more comprehensive view of the risk of each account. This is an important step in the risk assessment compared to comparable risk groups in order to determine the relative risk for each policyholder. 

Based on everything you have read above, if you believe the insurance industry is upgrading itself by these digital transformations and innovation we see nowadays, I suggest a couple of things you can do today, to prepare yourself for the future of insurance; 

• Learn about these different technologies
• Join the discussions (there are a ton of events / webinars going on)
• Reach out to insurtechs, give them use cases and ask them to come up with solutions (that’s the best project for a startup!), and hopefully it can lead to a POC (proof-of-concept)

Feel free to comment below and share use cases & experiences you have, especially #insurtechs and #underwriters

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