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Accenture – the global giant delivering technology and human ingenuity has released their report, “The Future of the Chief Underwriting Officer” and it is literally brimming with juicy, must-have nuggets.
It’s no secret that the insurance industry is ripe for change. The approach to underwriting is fragmented at best. With processes, data, operations and systems labouring separately and expensively; the clock is counting down for slicker, stronger and a holistic approach that can finally master the antiquated challenges and adapt to changeable market conditions.
And just who is best placed to lead this epic evolution…?
The Chief Underwriting Officer has traditionally focused on underwriting standards and quality. Different lines of business have operated independently which is both costly and cumbersome. This structure has been the biggest hurdle. Insight, speed and communication are lacking. The new breed of CUO is leading strategic change and taking responsibility for creating and setting underwriting strategy across all divisions.
Without this transformation, insurers risk the similar costly and fragmented approach of yesteryear which lacks the agility, tech, or data to evolve with the market and consumer.
So, what needs to be addressed and how…?
We have rounded up the key takeaways from the Accenture article to make sure your company has a seat at the table of the future…
The only true way to significantly reduce costs whilst improving underwriting quality is to rethink the underwriting process. Data excellence allows your Underwriter to use group data, internal and external insights and comparative analytics to make better choices. Imagine receiving intelligent priority data of when a customer is known to be shopping for rates and deals? Say hello to customer retention. You don’t need to pick one tool and stick with it. There is a suite of intelligent, collaborative tools available to inform your strategy and the customer experience. AI and automation have the potential to deliver a 30-40% cost reduction but they need the CUO’s guiding hand and vision.
The insurance industry is generally dissatisfied with the existing underwriting systems, workflows and analytics. Producers, agents, reinsurers, clients – they expect faster, real-time and high value. Rates and quotes, workflow solutions and platforms that cleanse, assess, model, present, automate are the answer to the historical problems. The old-school structure needs to be smashed. Third-generation underwriting platforms are now facilitating the enterprise underwriting transformation. At a minimum, these platforms are cloud-based and flexible with open APIs that easily connect to new data sources, as well as provide compute power for AI-based underwriting that will require ever greater amounts of data to build effective predictive models.
New channels, new products, new needs – the insurance landscape is changing. Predictive modeling, a personalised experience and new data sources have pushed the “policy admin age” of 20 years ago out in favour of the new era. To grow new channels or launch new products, insurers need to innovate with speed. Yet to be effective insurers need to use a strategic approach to balance innovation with enterprise resources to best test, learn, grow, or abandon ideas. An enterprise underwriting approach to innovation is a key part of making this a success.
From a customer perspective, digital channels are welcomed and expected. Consumers demand a seamless digitized experience in exchange for the data that they share. And if you can’t provide it, another insurer can. Covid-19 merely cemented and quickened the evolving digital trend and we have no doubt, it’s here to stay. CUOs need to be involved in allocating investment dollars to help push products to direct channels of distribution; not only will it help improve returns on investment, but importantly it will deliver a more consistent customer experience.
Previously not enough data, now we have copious amounts of it. This presents opportunities and challenges in equal measure. For the CUO, viewing and understanding the vast amounts of data is like a fish gazing upon a huge sailing vessel – there is no understanding of the perspective or extent of the entire ship. Put simply, carriers who are leveraging their data are outperforming their peers.
So what’s to be done? Cue AI. With imagination and focus, underwriting can realise the value of human + machine = a future-ready organisation. Streamlined, agile and harmonious – technology injects the speed, accuracy and knowledge to conquer the market. But tech alone is not the answer – it aids the more personalised, human approach that consumers demand. It’s a balance of art and science.
Perhaps the right question isn’t “when” but “how”?
If you’re ready to arm your insurance firm with the technology and insight to succeed, we can help…
Send is at the forefront of emerging technologies offering a composable SaaS insurance platform that allows you to pick and choose the components you need to gain a competitive edge. To book your demo, click here.
You can check out the full Accenture article here.