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Why insurers have to rescue underwriters from siloed information | Insurance coverage Weblog


In 2008, Accenture revealed the outcomes of the primary P&C Underwriting Survey in partnership with The Institutes. Because the longest-running longitudinal underwriting survey within the insurance coverage trade, this report reveals a holistic image of the place underwriting has been—and the place we’re going. Specifically, it exhibits us the connection between the objectives leaders set during the last decade and what the tangible progress has resulted from these initiatives.

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One of many key insights I gleaned from the 2021 P&C Underwriting Survey is that not a lot has improved for underwriters during the last 15 years. Regardless of leaps ahead in expertise, underwriters nonetheless face the identical challenges they did in 2008 and, in some areas, the state of underwriting as a core operate of the insurance coverage enterprise has worsened.

In my earlier posts, I mentioned the shift to automation, the results of expertise within the underwriting course of, and the diminishing deal with the work underwriters do. On this submit, I wish to spotlight the significance of the underwriting skillset and discover a unique strategy to marrying expertise to that ability set which can make underwriters’ jobs simpler and simpler.

Again in 2008, our survey revealed that greater than 40% of underwriters’ time was spent on non-core duties. Underwriters had been struggling to maneuver on from legacy techniques and undertake new options. Quick ahead to 2021 and the newest survey exhibits that solely 35% of underwriters really feel that expertise has decreased their workload. In 2008, that quantity was almost equal, at 36%.

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In each 2008 and 2021, a scarcity of information integration was cited as a problem that accompanied new expertise, with 72% of respondents in each years reporting the difficulty. In 2021, 79% of respondents reported that lack of course of integration was the most important cause expertise negatively impacted their workload.

This information made me replicate on the day-to-day obligations of the underwriter and take into consideration why expertise hasn’t made the act of underwriting any simpler. Right this moment’s responses present that there’s much less worth positioned on underwriters themselves. There’s empirical proof for this together with information displaying that survey respondents largely see underwriting recruitment, coaching and retention packages of their organizations as poor.

Moreover, deal with core underwriting controls and self-discipline is down: simply 30% of an underwriter’s time is spent doing threat evaluation and producing quotes. Threat evaluation is the core competency of an underwriter. Their job is to assessment information throughout totally different sources and synthesize it to make an correct (and worthwhile) determination. With this lens, I see the underwriter as the unique information scientist.

The status and worth positioned on the underwriting career has taken a dive during the last 15 years, which has left underwriters caught with the identical issues they confronted over a decade in the past. Insurers have prioritized minimizing bills and “demystifying” underwriting by automating the method or lowering the underwriter’s function in threat evaluation.

We’ve completed this by offloading work from the underwriters, supplied new threat and pricing fashions to assist determination making and tried to leverage automation to make underwriting simpler. None of those initiatives are damaging in and of themselves. All of them work effectively for assessing less complicated, homogenous dangers whereas driving down price and bettering pricing consistency. However they miss the elemental challenge of extra advanced underwriting.

The actual problem is that underwriting continues to be a paper-first course of with vital information siloed in PDFs and spreadsheets connected to emails from brokers. To evaluate threat, underwriters nonetheless have to maneuver between totally different paperwork, on the lookout for information that’s formatted in numerous methods relying on the dealer it’s coming from.

Although we’ve tried to make the processes round underwriting simpler, there hasn’t been a deal with bettering the information science facet of underwriting. This requires information to be extra accessible. We have to implement options that assist underwriters extract, handle and assess all their information in a single place in a manner that additionally supplies related context and deeper insights.

Many organizations have made vital strikes to become data-driven during the last 15 years. Insurance coverage has all the time been pushed by information, nevertheless it’s time to rethink how information aggregation and evaluation are optimized in underwriting processes. If insurers wish to see larger effectivity and improved consistency and high quality in threat and pricing choices, our focus can’t stay on offloading work from the underwriter. We have to assist underwriters do what they’re finest at analyzing info, uncovering patterns and making choices primarily based on a holistic view of an applicant.

To do that, we have to think about third-generation underwriting platforms like these I mentioned in my earlier submit. It actually comes down to 5 easy priorities:

  1. Put money into options that pull all the information underwriters want out of their silos, bringing info from PDF and spreadsheet attachments into one place, ultimately eliminating that mode of communication altogether.  
  2. Manage info, information and information across the crucial underwriting determination steps of triage, threat analysis and pricing.
  3. Current info in context. For instance, allow underwriters to have a look at new submissions in comparison with comparable submissions to assist them perceive how the submission or renewal differs.
  4. Combine this data-driven, analytics-first strategy into current workflows to make the expertise seamless.
  5. Arrange the standard controls, measures and suggestions mechanisms to enhance the standard and consistency of underwriting throughout the new course of.

Fortunately, we’re already seeing insurers taking steps in direction of enchancment on this space. The 2021 survey exhibits that 67% of insurers will prioritize investments in underwriting platforms over the following three years. Seventy-one p.c wish to add predictive analytics to their tech stack whereas 66% plan to put money into buyer and dealer portals, one other solution to streamline information aggregation.

If you wish to know extra about how we’re serving to firms handle these 5 concepts, let me know. 


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Disclaimer: This content material is supplied for basic info functions and isn’t meant for use instead of session with our skilled advisors.

 

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