Targeting the future of underwriting – hyper-exponential

Targeting the future of underwriting – hyper-exponential

I have seen many specialty and commercial insurers attracted by the promise of change, only to be left with poorly integrated legacy systems and the same inefficiencies they have been grappling with for decades.

Tom Chamberlain hyperexponential

While other sectors, such as finance, have evolved to a more streamlined and digitized way of working, insurance is still not adequately equipped for the future.

Our recent research explored the current state of underwriting, what Underwriting 3.0 could and should look like and actionable steps to get there.

Subscribe now

Our research has discovered that the typical underwriting workflow is defined more by heavy manual input than smooth processes and dynamic insights.

Over half of the average underwriter’s work week is spent entering information into the system!

Hyperexponential EV chart Dec 23

This same slowdown affects other aspects of pricing, from quoting to linking — which typically takes more than a week — to peer review, which can take a whopping three to four weeks.

Guarantors are well aware that everything is not as it should be. Chillingly for those invested in the future of insurance, 82% of insurers did not feel confident they would fit into purpose-built pricing models in the future.

We asked underwriters how technology can enhance their role and their answers revealed problems with the current state of pricing and a path for the future.

Underwriting 3.0

Let’s paint a brief picture of Underwriting 3.0.

In the future, every decision will be based on rich data, collected automatically and easily.

Freed from repetitive manual tasks, insurers have more time to do value-added work that is impactful and fulfilling.

The entire pricing process has become significantly faster and more accurate to deliver measurably better results in a competitive market.

Things are starting to move in the right direction, with generative AI to make sense of unstructured data, predictive models for real-time insights, and automation breaking through the muck of legacy processes.

But while digital innovation is the catalyst for pricing transformation, insurers need to boldly embrace change to truly unleash next-generation underwriting.

Active and concrete efforts must be made to:

  • Take full advantage of automation potential
  • Strengthening cooperation between actuaries and underwriters to obtain better models and better results
  • Internal and third-party data are at the underwriter’s fingertips to make faster, data-driven decisions
  • Developing the guarantor’s investment portfolio management skills

This is not progress for the sake of progress. As Klaus Schwab of the World Economic Forum said: “In the new world, it is not the big fish that eats the small fish, but the fast fish that eats the slow fish.”

Returning to the broker quickly enhances your chance of winning business. Insurers that do not push the boundaries of their platforms and operations will find that their competitiveness is eroded as more dynamic players move forward.

Underwriting 3.0 is possible today, just a step or two ahead of most organizations.

It’s up to insurance companies – and it’s up to you – to make it a reality.

Learn more and watch in full Vision and path to IPO 3.0 Report, click here.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *