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2021 IN REVIEW | Automated underwriting In association with Concirrus
The rise of the bionic underwriter The media is awash with articles discussing digital transformation and the importance of data in decision making. The industry is being convinced of the benefits of turning insurance from an analogue into a digital market – ‘it’ll be quicker and will reduce costs’. But can we be confident that the market is truly ready for such an approach and is it what’s best for the market? Andrew Yeoman, CEO of insurtech, Concirrus, considers what automation might mean for the market and the people working in it With a growing appetite for operating efficiency, the insurance market has reached a point where a natural next step is that of automation. The availability of vast new sources of data, more advanced data analytics and digital tools opens a world of potential benefits for both insurers and their customers. However, automated underwriting is a change that strikes at the very heart of a traditional insurance business. Rather than it being a utopian technology that will solve every business problem, it is a tool that can, where applicable, help make better decisions faster. No-one would want to have a job that could be done better by a computer yet there are many such tasks in each and every insurer that could be automated. Take submissions for example. With hundreds of submissions a day, automation technology can review those submissions without human involvement and triage them against a set of criteria. Technology can analyse the proposed premium versus the technical price of the risk and assess on past performance whether this is a broker that they are likely to bind with. This is technology that leaves you in control but takes away mundane tasks with ease. If a risk meets your criteria, that you control, the binding process can also be automated. More business can be written with the same amount of resource and this ultimately improves The Marine Insurer | January 2022
operating efficiency and protects jobs. Automation has a huge part to play in better managing the manual processes that currently characterise underwriting and claims. Hundreds of hours are being spent on reading documents, attachments and emails to then key and rekey that data. With the use of automation technology, those hours can turn into minutes. This frees up time that can be given to tasks which uniquely require the underwriter’s experience and skillset to the benefit of the company.
IS THE MARKET READY? Candidly, this is an existential need. The ‘digital future’ for the market is not optional, it is where we will end up. At an individual level, it is natural to be concerned as we enter this ‘brave new world’. But simply put, if we don’t do it, it will be done to us. Technology fuelled competition is entering the market with advantageous expense ratios. Automation can drive efficiency and this efficiency is necessary to ensure that the market thrives. Rather than automation being perceived as threatening the fundamentals of the industry, the reality is that it is a tool that should be embraced to improve the efficiency of the market. Arguably, the role of the underwriter is changing, in the best possible way. Insurers can reap a number of benefits by using the tools
