A Robotic Arm for Underwriters

There are volumes of data assets to sort through when analyzing the seemingly random and complex risks faced by insurance companies. It is an underwriter’s job to see and comprehend information that is hidden in this mass of information, sometimes well below the surface. With the available data continuing to expand and sourcing options increasing, the underwriter’s ability to effectively evaluate risk, set prices and construct a portfolio of business optimized to a firm’s goals has never been more challenging.

But a new and rebalanced partnership between underwriters and the data and machines they leverage has the potential to significantly ease them by removing the barriers to incorporating new information into the risk decision and pricing process and ultimately enabling underwriters to focus on what they do best — making strategic, informed decisions.

Underwriting doesn’t work without underwriters

The current discussion of digital transformation generally focuses on how technology will allow insurance companies to move faster, improve processes and make better use of data in their underwriting workflows. While that is all true, there is far less focus on what the role of humans will be. This understandably leaves many feeling uneasy and resistant about moving forward, which can be detrimental to adoption and success.

The fact is that underwriting is an extraordinarily complex task, and the human factors of the job are — and will remain — extremely important. There is an opportunity for machines to function like a robotic arm, an extra set of hands to augment tasks, making underwriters more productive and ensuring greater accuracy. Underwriters, as the strategic thinkers and core decision-makers, can then focus on the core of their role, evaluating and pricing risk that is good for the business.

The role for technology in underwriting

One thing technology is really good at is automating repetitive, non-analytical work that doesn’t require an underwriter’s time and attention such as converting submissions into quality, usable data. For underwriters, the predictably unpredictable fashion in which unstructured data arrives — with high variability in document types, formats and content configurations — creates an extremely cumbersome process. As a result, firms are forced to have small armies focused solely on data entry and validation. By letting technology automate this piece of the workflow, time and errors are dramatically reduced, and underwriters can be assured they have the right data at the right time.

The organization and presentation of data is also something that technology excels at. Assuming that underwriting is not a wholly random process, every time a risk is written or declined, information is created. Automatically storing that data can alert the underwriter to anomalies, surfacing patterns that are worth evaluation. Underwriters can then interpret those patterns, take quick action and drill into things that will allow them to make better, more data-driven risk decisions.

Building a successful partnership

Making sure any technology partnership is focused on the appropriate business problems is key. Too often, the underwriting user is not prioritized, with technologists instead getting caught up in ideating on what can be done versus what should be done. Only by focusing on the latter will the incremental improvements that add up to meaningful change be realized, and those are nearly always identified by working directly with the underwriting teams in the trenches. Any other approach will likely result in tools that underwriters can’t trust to generate true business value.

Technology presents underwriters with a tremendous amount of opportunity, but a measured approach to harnessing it is paramount. The most effective projects are handled incrementally, slowly but surely putting technology that solves underwriting business problems in the hands of users. This approach brings team members along on the journey, ensuring greater adoption and overall success for the business.

Read the article from PropertyCasualty360 here.