In the first three parts of this series, we looked at changes to channels and products; the explosion of new data sources and tools; and the integration of new service providers and tools into the underwriting process.

This week, we will examine how underwriting management needs to lead the way in adapting to the new ecosystem and how underwriting operations are evolving in the digital age.

Traditionally, underwriting management has been straightforward. It focused on two key tasks: managing the underwriters (for effective and efficient performance) and managing the book (to identify needs in pricing, form or guidelines). The work wasn’t easy, but the roles, processes and solutions were relatively well defined. In the new digital ecosystem, this traditional infrastructure no longer applies.

Digital underwriting landscape

In order to thrive in the future, underwriting management needs to focus on three main areas:

  1. Channel management is transforming from agent/broker management into the complexities we see in retail industries today. Underwriting management needs to think through each of the channels available and define which products, services, and underwriting processes will best serve that market. For example, a simple term life product with minimal customization and no underwriting may not work in an agency channel, but perhaps could be perfect in an airport kiosk covering a person’s trip.
  1. Book management also needs to evolve. Rather than just watching the performance of the book, underwriting leaders have to analyze the automated flows and rules, and evaluate external data to make necessary changes to the book prior to loss incurrence.
  1. Robot management is becoming a factor. As the use of robotics, rules, artificial intelligence and machine learning increases, underwriting management needs to monitor and adapt these tools according to changes in market conditions. With more vendors/alliances joining the marketplace as service providers, data providers or sourced operations, underwriting leaders have to transform their management process to control them.

Underwriting operations continue to feel the price pressures of the industry and the impact of new channels and offerings. Carriers’ field offices are becoming smaller and more focused on new business development. Underwriting leaders have explored an array of cost effective solutions from onshore hubs to offshore serve centers, from BPO providers to automation, robotics and machine learning/artificial intelligence.

It is underwriting management’s responsibility to figure out how to unite and manage these different service entities into the underwriting operations, and how best to set them up efficiently and effectively to service a given customer, channel and product.

In the last part of this series, we will look at some ways underwriting leaders are doing this.

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