Why insurers have to rescue underwriters from siloed knowledge | 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. Particularly, it exhibits us the connection between the targets leaders set during the last decade and what the tangible progress has resulted from these initiatives.

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 know-how, 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 consequences of know-how within the underwriting course of, and the diminishing concentrate on the work underwriters do. On this submit, I wish to spotlight the significance of the underwriting skillset and discover a distinct strategy to marrying know-how 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 have been struggling to maneuver on from legacy methods and undertake new options. Quick ahead to 2021 and the newest survey exhibits that solely 35% of underwriters really feel that know-how has decreased their workload. In 2008, that quantity was almost equal, at 36%.

In each 2008 and 2021, an absence of information integration was cited as a problem that accompanied new know-how, with 72% of respondents in each years reporting the problem. In 2021, 79% of respondents reported that lack of course of integration was the largest motive know-how negatively impacted their workload.

This knowledge made me replicate on the day-to-day duties of the underwriter and take into consideration why know-how 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 knowledge displaying that survey respondents largely see underwriting recruitment, coaching and retention packages of their organizations as poor.

Moreover, concentrate on core underwriting controls and self-discipline is down: simply 30% of an underwriter’s time is spent doing threat evaluation and producing quotes. Danger evaluation is the core competency of an underwriter. Their job is to evaluation knowledge throughout totally different sources and synthesize it to make an correct (and worthwhile) resolution. With this lens, I see the underwriter as the unique knowledge 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 reducing the underwriter’s function in threat evaluation.

We’ve finished this by offloading work from the underwriters, supplied new threat and pricing fashions to assist resolution making and tried to leverage automation to make underwriting simpler. None of those initiatives are unfavorable in and of themselves. All of them work nicely for assessing less complicated, homogenous dangers whereas driving down value and bettering pricing consistency. However they miss the basic situation of extra complicated underwriting.

The actual problem is that underwriting continues to be a paper-first course of with necessary knowledge siloed in PDFs and spreadsheets hooked up to emails from brokers. To evaluate threat, underwriters nonetheless have to maneuver between totally different paperwork, in search of knowledge that’s formatted in several 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 concentrate on bettering the info science facet of underwriting. This requires knowledge to be extra accessible. We have to implement options that assist underwriters extract, handle and assess all their knowledge in a single place in a manner that additionally gives 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 knowledge, but it surely’s time to rethink how knowledge 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 selections, our focus can’t stay on offloading work from the underwriter. We have to assist underwriters do what they’re finest at analyzing data, uncovering patterns and making selections based mostly on a holistic view of an applicant.

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

Put money into options that pull all the info underwriters want out of their silos, bringing data from PDF and spreadsheet attachments into one place, finally eliminating that mode of communication altogether.
Manage data, data and knowledge across the crucial underwriting resolution steps of triage, threat analysis and pricing.
Current data 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.
Combine this data-driven, analytics-first strategy into current workflows to make the expertise seamless.
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 % need to add predictive analytics to their tech stack whereas 66% plan to put money into buyer and dealer portals, one other approach to streamline knowledge aggregation.

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

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