Why insurers need to rescue underwriters from siloed data | Insurance Blog

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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. Specifically, it exhibits 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 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 consequences of expertise within the underwriting course of, and the diminishing give attention to the work underwriters do. On this publish, 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 more practical.

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 latest survey exhibits 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 problem. In 2021, 79% of respondents reported that lack of course of integration was the largest motive expertise negatively impacted their workload.

This information made me replicate on the day-to-day duties of the underwriter and take into consideration why expertise hasn’t made the act of underwriting any simpler. At present’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 danger evaluation and producing quotes. Threat evaluation is the core competency of an underwriter. Their job is to evaluation information throughout completely 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 position in danger evaluation.

We’ve accomplished this by offloading work from the underwriters, supplied new danger and pricing fashions to help 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 effectively for assessing easier, homogenous dangers whereas driving down price and bettering pricing consistency. However they miss the elemental concern of extra complicated underwriting.

The actual problem is that underwriting continues to be a paper-first course of with necessary information siloed in PDFs and spreadsheets hooked up to emails from brokers. To evaluate danger, underwriters nonetheless have to maneuver between completely different paperwork, searching for information 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 give attention to bettering the information science side 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 approach that additionally supplies related context and deeper insights.

Many organizations have made vital strikes to become data-driven over the past 15 years. Insurance coverage has all the time been pushed by information, however 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 danger 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 data, uncovering patterns and making selections 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 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 data from PDF and spreadsheet attachments into one place, finally eliminating that mode of communication altogether.  
  2. Arrange data, data and information across the vital underwriting determination steps of triage, danger analysis and pricing.
  3. Current data in context. For instance, allow underwriters to take 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 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 direction of enchancment on this space. The 2021 survey exhibits that 67% of insurers will prioritize investments in underwriting platforms over the subsequent three years. Seventy-one p.c wish to add predictive analytics to their tech stack whereas 66% plan to spend money on buyer and dealer portals, one other method to streamline information aggregation.

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


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

 



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