Technological advances are streamlining the insurance underwriting process. Insider Engage caught up with Ben Huckel, co-founder of Send at Insurance Insider’s London Market Conference to discuss the role of underwriters, the challenges they are facing underwriters and why technology can give them a competitive advantage.
One of the biggest challenges facing underwriters in today’s market is time spent on manual tasks, which increases the risks of errors.
Huckel said: “Underwriters spend most of their time doing performing non-value add tasks. Therefore rather than performing the job of underwriting, they get caught up in the administration of that underwriting and they work on lots of different systems. Typing in the same data into different systems can be quite an error prone activity.
Huckel pointed out while Mckinsey found 30 to 40% of an underwriter’s time is spent on these non-value add tasks, analysis by Send found that this is closer to 80%.
“It's a substantial amount of time that the underwriter is not able to do the job that they've been asked to do,” explained Huckel.
“Underwriters have to pull data in from a number of different sources, extrapolate that data and then try to make sensible decisions. Quite often they can't do that until after the event. Therefore, they might have written the business by the time they've got the information to understand whether they need to buy reinsurance or not.”
For underwriters to maintain a competitive advantage, Huckel, says “they need to be able to respond to market conditions bring new products to market very quickly, be able to adapt and be able to recruit great talent as well.”
Bionic underwriting can also be a way of gaining a competitive edge. “It enables underwriters to pick and choose the areas they enhance.
“Underwriters who want to leverage the capabilities that will give them a competitive advantage can use technology to increase the capability within the areas such as data processing, data extraction and some automated tasks.
“Automated tasks can be automatically kicked off, completed and fed into the process, and the underwriters are able to take that idea of ‘bionicness’ and can augment that data and that science with the art of underwriting.”
Technology has played a significant part in the underwriting process but, Huckel explains it does not replace the role of the underwriter.
He said: “It is to augment the underwriter’s skills with that bionic capability in a sensible way, which is where your whole architecture and your bionic architecture needs to fit in.”
As underwriters process vast amounts of data, the biggest challenge for them now is being able to extract that data and use it in a meaningful way.
“There's a prevalence of data, there's more and more data services, and the amount of data is bigger than we've ever had it and the accessibility is bigger,” said Huckel.
“However underwriters struggle to understand what's relevant out of those datasets because the data is huge. They need to be able to extract that information in a relevant way. That is tricky, and that is where technology can help.”
