In the first part of this series, we looked at how high performers in underwriting utilize new analyses, new data sources, and new analytics and visualization tools to explore and assess portfolio opportunities and deficiencies.

The most important advances in portfolio management, however, are not the data, tools and techniques that help identify issues and opportunities. More critical are the speed and methods with which it can act.

Historically, portfolio management has had three main components:

Fast and integrated process is key to effective book management - The three primary components of portfolio management

The result is that portfolio management actions have typically been overdue, and take the form of drastic changes rather than more frequent, more precise corrections.

Carriers need to include the new tools and methods in the portfolio management process so that the insights they produce can be rapidly integrated into ongoing operations to improve performance:

  • Underwriting rules: As modern policy and underwriting desktop solutions emerge, the underwriting workflow is becoming increasingly rules-driven. In developing rules-based workflows, build portfolio management out as a feedback mechanism. Use this feedback to constantly evaluate and adjust the workflows for optimal efficiency and effectiveness in terms of flow, path and outcome.
  • Underwriting performance: While underwriter performance often has a profitability component, this is usually at a gross or overall level. Advances in portfolio management can produce analytical insights into an underwriter’s strengths and weaknesses, revealing specific areas for improvement. For example, they might show that a generally profitable underwriter is under-performing in a few specific standard industrial classification (SIC) codes or when negotiating with a particular broker.
  • Broker performance: Insights into the profitability of different types of business from a specific broker can help underwriters and business development leads identify where they should expand or restrict business with the broker.

Through the utilization of new data, new analytics and visualization tools and fast and integrated processes, high performing carriers in the future will be much more proactive and forward-looking in how they manage their portfolios.  

Join us next time, when we take a closer look at how to decentralize the insights generated by portfolio management, and questions to consider before decision-making.

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Isn’t it time you managed your insurance portfolio better?

Effective portfolio management is critical to underwriting profitability. Learn about managing your insurance portfolio better.

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