Why insurers need to rescue underwriters from siloed data


In 2008, Accenture printed 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 over the past 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 over the past 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 perform of the insurance coverage enterprise has worsened.

In my earlier posts, I mentioned the shift to automation, the results of know-how within the underwriting course of, and the diminishing give attention to the work underwriters do. On this put up, I wish to spotlight the significance of the underwriting skillset and discover a distinct strategy to marrying know-how to that talent 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 had been struggling to maneuver on from legacy methods and undertake new options. Quick ahead to 2021 and the newest survey reveals 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 knowledge integration was cited as a problem that accompanied new know-how, 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 cause know-how negatively impacted their workload.

This information made me mirror 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. At this time’s responses present that there’s much less worth positioned on underwriters themselves. There’s empirical proof for this together with information exhibiting that survey respondents largely see underwriting recruitment, coaching and retention applications of their organizations as poor.

Moreover, give attention to 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 evaluate 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 occupation has taken a dive over the past 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 finished 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 adverse in and of themselves. All of them work properly for assessing less complicated, homogenous dangers whereas driving down price and enhancing pricing consistency. However they miss the basic problem of extra advanced underwriting.

The actual problem is that underwriting remains 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, in search of 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 give attention to enhancing the info 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 method that additionally offers related context and deeper insights.

Many organizations have made important strikes to develop into data-driven over the past 15 years. Insurance coverage has at all times been pushed by information, but it surely’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 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 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 put up. It actually comes down to 5 easy priorities:

  1. Spend money on options that pull all the info underwriters want out of their silos, bringing data from PDF and spreadsheet attachments into one place, ultimately eliminating that mode of communication altogether.  
  2. Set up data, information and information across the essential underwriting determination steps of triage, threat analysis and pricing.
  3. Current data 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 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 the direction of enchancment on this space. The 2021 survey reveals that 67% of insurers will prioritize investments in underwriting platforms over the following three years. Seventy-one % want to add predictive analytics to their tech stack whereas 66% plan to put money into buyer and dealer portals, one other option to streamline information 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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Disclaimer: This content material is supplied for common data functions and isn’t meant for use rather than session with our skilled advisors.

 

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