Why insurers must 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 reveals 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 expertise, underwriters nonetheless face the identical challenges they did in 2008 and, in some areas, the state of underwriting as a core perform of the insurance coverage enterprise has worsened.

In my earlier posts, I mentioned the shift to automation, the consequences of expertise within the underwriting course of, and the diminishing concentrate on the work underwriters do. On this publish, I need to spotlight the significance of the underwriting skillset and discover a unique method to marrying expertise to that ability set which is able to 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 techniques and undertake new options. Quick ahead to 2021 and the newest survey reveals that solely 35% of underwriters really feel that expertise has decreased their workload. In 2008, that quantity was almost equal, at 36%.

In each 2008 and 2021, an absence of knowledge 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 largest motive expertise negatively impacted their workload.

This knowledge made me replicate on the day-to-day tasks of the underwriter and take into consideration why expertise hasn’t made the act of underwriting any simpler. Immediately’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 assessment knowledge throughout completely different sources and synthesize it to make an correct (and worthwhile) determination. 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 position in threat evaluation.

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

The true problem is that underwriting continues to be a paper-first course of with vital knowledge siloed in PDFs and spreadsheets hooked up to emails from brokers. To evaluate threat, underwriters nonetheless have to maneuver between completely different paperwork, on the lookout for knowledge 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 concentrate on bettering the information science side 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 method that additionally supplies related context and deeper insights.

Many organizations have made important strikes to develop into data-driven during the last 15 years. Insurance coverage has at all times been pushed by knowledge, nevertheless it’s time to rethink how knowledge aggregation and evaluation are optimized in underwriting processes. If insurers need 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 greatest at analyzing info, uncovering patterns and making selections primarily based on a holistic view of an applicant.

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

  1. Spend money on 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, data and knowledge across the essential underwriting determination steps of triage, threat analysis and pricing.
  3. Current info in context. For instance, allow underwriters to take a look at new submissions in comparison with related submissions to assist them perceive how the submission or renewal differs.
  4. Combine this data-driven, analytics-first method into present workflows to make the expertise seamless.
  5. Arrange the standard controls, measures and suggestions mechanisms to enhance the standard and consistency of underwriting inside the new course of.

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

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


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

 

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