Other parts of this series:
- Evolving insurance ecosystem requires overhaul of underwriting function
- Solution-oriented products, market awareness two key traits of digital underwriters
- Technology, analytics will play critical role in underwriting for digital underwriters
- Cost-efficiencies, channel-intimate approach vital for carriers evolving into digital underwriters
- The digital underwriter: How underwriting leaders must evolve; and quickly starting your organization’s evolution
Wrapping up our series on the traits that carriers must develop to compete in the evolving digital insurance ecosystem, I examine the strengths that underwriting leaders must possess and new roles in the underwriting function. I’ll conclude with a 90-day plan for how carriers can get started transforming themselves into digital underwriters.
As noted in the Accenture report, Insurance strategy: Evolving into a digital underwriter, the functions of underwriting in a high-performance carrier will remain as critical as they are today. However, the best underwriting leaders will have different characteristics. Besides being strong risk and business leaders, they will have to be:
- Analytically attuned, which will drive improved decision-making and profitable growth.
- Organizationally savvy, sharing knowledge and insights across the enterprise and bringing together various parts of the organization to respond nimbly to market needs.
- Solution-oriented, understanding what customers need in terms of risk protection, risk management, and other services and how to bring together the channels, services, and solutions required to meet those needs.
- Operationally sound and cost-efficient.
- A change leader who will lead the underwriting function and organizationthrough this change, both engaging the current team and attracting new strong talent.
Digital underwriting leaders also will need to develop new roles and talent to handle responsibilities tied to portfolio underwriting – underwriting collections of risk – which is becoming a larger share of the business. These new roles include:
- Portfolio underwriters, who continually evaluate and adjust microbooks of business that are automatically or remotely underwritten.
- Rules managers, who evaluate and continuously improve workflow and risk-based rules to drive optimal performance.
- Underwriting scientists, who use internal and external data sources and analytics and behavior analysis to improve risk selection and risk behavior.
- Underwriting partner managers, who manage underwriting quality and relationships with various external underwriting partners and service providers.
By evolving into digital underwriters, carriers will be able to offer the agility, efficiency and customer-centricity that are the hallmarks of market leaders while delivering the profitable growth that shareholders demand. We have seen leaders in this area reduce direct labor costs by more than 30 percent, achieve 2-3 points of loss ratio improvement, and drive significant profitable growth.
But underwriting needs to commit to starting this transformation soon or risk falling farther behind competitors that already have. We propose the following 90-day plan for carriers to get started:
- Examine whether you could offer current customer segments and lines of business internal or external services that would better manage risk aa well as drive a competitive advantage and growth.
- Assess current distribution channels for opportunities to sell at least some products in a different way.
- Start a pilot project evaluating external data to support traditional risk solutions.
- Pilot some quick-win analytics and external solutions to equip your underwriting function with better decision-making tools.
- Develop a digital underwriter strategy and roadmap for your organization to follow.
To learn more in the meantime, download this report: Evolving into a digital underwriter