The Future of Underwriting

iStock_000058487272_SmallAs insurers seek mega investments in their front-office competencies, several are focusing on underwriting. There is a broad agreement that the working of this function must transform if insurers have to revamp their operations. Within the function, the emphasis would move towards internal processes/specific transactions. Hence, underwriters in the future would become experts of many activities.

An increase in automation and robust analytical competencies have played a big role since they provide underwriters an opportunity to increasingly focus on high-value functions – account planning, solution development, agent partnering, and risk assessment. Again, other advanced technologies would assist in transforming the way underwriters operate, while expanding the ways they add value to the business.

Normally, underwriting has been the nerve center of the insurance sector. In fact, according to some experts, underwriting is the same as the insurance sector. The industry would not function without the capability to assess risk/price/issue policies.

In recent times, the lead to the insurance C-suite has taken place via finance. A certain amount of talent is imported from other financial services sectors. On the other hand, the availability of predictive modeling has transformed the governing rules for underwriting.

In future, underwriters would play multiple roles including: 

  • Sales
  • Decision making
  • Customer service
  • Innovation

Sales

Underwriters can utilize their ability to tap information for enhancing the value of the sales process. For instance, the insight from expert underwriters could improve the effectiveness of lead identification and qualification. It can also be used for modifying advertising campaigns. Underwriters would depend on unified marketing and sales platforms. Semantic web technology would use procedures to accumulate data to interpret information.

Decision Making

The analytic transformation that had technically changed the insurance environment in the last 10 years would expand with an effect on benefits for underwriting. Several financial models would be used by expert risk stakeholders to accomplish advanced analytics and rules-based decision making.

Interactive analytical tools will provide opportunities for scenario modeling and information visualization. Machine learning would facilitate continuous evaluation of data for determining deviations and subtleties to enhance the accuracy of models/rules.

Customer Service

As the customer experience gains significance, underwriters in the future would transform the solution across the relationships. The emphasis would be on establishing a team approach to facilitate servicing through collaborative tools.

Innovation

Underwriters must sense the beat of the market, both the insurance sector and the customers’ industry. Competitive differentiation is due to excellent relationships, risk assessment, and servicing. The insights must be transformed into products/services customized to the specific requirements of the customer.

Underwriters will increase the capabilities, mostly in analytics, relationship and utilization of modified technology. They will leverage robust models to develop unique solutions. Underwriters would assist insurers to calculate the optimal method to utilize sensor-based technologies for tracking customer exposures.

In the future, underwriting companies would emphasis on fostering new and cementing current relationships based on the creation of specific insights and formation of customized solutions with regard to customers that are easily elucidated and categorized.

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