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BY TONY CID
An exciting new frontier of improved customer service and profitability is emerging in the Property and Casualty insurance industry — that of underwriting.
Where historically an underwrit-er’s job has been viewed as one of accepting or rejecting risks and also one of creating a homogenous portfolio of risks, we are witnessing the emergence of a new breed of underwriters because the advent of new technology. This new class of underwriters is leading the change in revolutionizing the insurance business and better equipped to handle risk management.
Technology holds the key to the shifting sands of market dy-
namics in the industry. We are surrounded by a combination of market forces that are moving customer expectations. There is a greater number of millennials joining the workforce, customers’ preferences and expectations are being reshaped and sharpened by providers such as Facebook, Amazon, Alibaba and Seamless. Even our transportation is becom-ing on-demand with providers such as Uber and Lyft. Money is being increasingly digitalized. In such a stimulating and progres-sive environment going through a great amount of flux, the nature of risk assessment and selection must address not only internal require-ments, but those of the insured and the agent.
STATUS QUO IN UNDERWRITING
In conventional underwriting, agents send in their applications to an underwriting contact within the carrier’s organization.
The underwriter receives the appli-cations in a paper-based and mostly manual environment. The underwrit-ing process is cumbersome, with the underwriter spending a considerable amount of time in researching the risk and populating data subsequently in an internal system. This stage common-ly involves a lot of navigation back and forth through non-regularized systems such as e-mails and legacy systems, such as policy administration.
The underwriter is left with little bandwidth in closely examining, quot-ing and optimally pricing the risk.
As an industry, there is an over-whelming need for technology to create fluid connections among the various stakeholders in the insur-ance process.
The technology must include robust analytical capabilities that free the underwriter to address customer and agent needs as well as ensure ap-propriate risk pricing and positioning. A cohesive technology that spans across agent portal, policy and claims systems, document manage-ment and e-mail, to predictive mod-els, analytics, business intelligence tools, and a variety of data services.
MAY 16, 2016
Technology can create a new breed of underwriters
FILED UNDER: CARRIER INNOVATIONS, TECHNOLOGY IMPLEMENTATION
www.propertycasualty360.com
Underwriting is one of the few areas in the insurance industry that has yet to use technology to the fullest.(Photo: iStock)
The application must also take into account the interconnected nature of the process and should bring in workflow capabilities to move tasks from agents to underwriters seam-lessly. Empowered by technology, the underwriting staff can expand their view of risk by working with agents in real time to better manage their risk. Agents also have a window into the missing information about risks and exposures, and can remove obstacles the application process encounters.
TECHNOLOGY AS A DIFFERENTIATOR
As an industry, we have focused the underwriter’s role around receiving data that comes from the producer, check-ing to make sure the data is accurate
and determining based upon the data, whether the risk is acceptable or not.
In addition, underwriters must assess whether the risk is even a risk that they would like to write. Technol-ogy has progressed to the extent that a volume of the risks that the carrier organization is screening can be underwritten through rules-driven pro-filing and straight-through processing. Carriers can take on the risks suited to their appetite by setting pre-qualifi-cation and eligibility rules. This helps
build a better book of business and positively impacts profitability.
The present under-writing ecosystem is burdened with a pol-
icy-centric view of customers, leading to not meeting customer expectations of a seamless interaction with com-panies. The process must become customer-centric. Modern technology perfectively positioned should provide a single view of the insured’s account
across the enterprise, lines of busi-ness, policy systems and devices. Applying these capabilities enables the underwriter to focus on increased agent efficiency and meeting custom-er expectations while better analyz-ing and pricing every risk.
WHY IS THIS NECESSARY?These new applications are rich in
the sources of data available to the underwriter, which will increase the un-derwriter’s effectiveness and help them better manage their risk by reducing the amount of time spent searching through various data sources.
Standardizing the data used by the underwriters, embedding consistent rules throughout the organization and allowing underwriting knowledge to be codified and maintained will pro-vide a single source of truth for the or-ganization. As importantly, underwrit-ers will be able to identify cross sell and upsell opportunities across lines of business. In general, these applica-tions will allow the underwriter to be more surgical in their approach to the business and generate loss ratios that will outperform the industry.
Underwriting is one of the few bastions left to fully leverage and use technology to the fullest. Given the current competitive landscape, it is essential that available technolo-gy be applied to the greatest extent to accurately price risks, create stronger relationships with agents and better serve customers.
Tony Cid, Global Head of Commercial
Insurance at Intellect SEEC.
MAY 16, 2016
Reprinted with permission from the May 16, 2016 edition of PropertyCasualty360 © 2016 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382 or [email protected]. #PC3-05-16-02
www.intellectSEEC.com
(Photo: Shutterstock)
On the whole, we need to increase the ease of doing business between the carriers and the agents to better serve the insured.
