Insurers’ secret sauce: advanced content understanding within underwriting

There is no shortage of data available to underwriters. There is more than enough to build a comprehensive picture of risk, with more streams coming online every day. However, organisational and cultural silos still get in the way of an effective data-driven underwriting culture.

Insurers need to look for ways to unite teams and systems to get the most out of the information available to them.

On June 29, Eileen Potter, solution marketing manager for insurance at ABBYY, joins a panel of distinguished data and underwriting innovators at this year’s Underwriting Innovation Europe, brought to you by Intelligent Insurer.

They will discuss how to bring various sources of data together to build a truly effective picture of client risk that will build customer satisfaction and drive business-wide profitability.

Why is building a data-driven culture a hot topic right now?
Simply put, it’s because good underwriting is central to an insurer’s profitability. However, when it comes to underwriting, the level of complexity varies from personal lines to commercial to life.

On the personal lines side, it’s always more standardised and the industry has done a really good job of transforming, but within commercial and life, we’ve lagged where insurtechs have done well. Established carriers have struggled because even if the rating of the risk itself was automated, the underwriting was less so.

There are certainly some underwriting dashboards available, but a comprehensive—and collaborative—view of all available information needed to evaluate a risk for every stakeholder involved in the underwriting process is still elusive for many insurers.

The bottom line is that making data-driven decisions will drive profitable premium growth. It’s all about making good decisions and you can’t’ do that if you don’t have data in front of you. Carriers have data warehouses, but you don’t need data in a warehouse, you need it to be accessible so the underwriters can have a 360-degree view.

What is getting in the way of a data-driven culture?
Large insurers have so many siloed systems that there is a lack of accessibility. There needs to be a culture of collaboration between internal and external stakeholders throughout the underwriting process, but you also need it between your systems.

Low-code platforms and artificial intelligence (AI) can help by giving you a dashboard of digital intelligence—information that is the intersection of your people, content, and processes. You don’t want simply to digitise systems—you will risk lacking vital pieces of information. You need the whole picture.

How do insurers prioritise the most valuable information?
Advanced content management systems do more than ingest data using newer technologies, such as no-code intelligent document processing platforms which enable insurers to easily use optical character recognition (OCR), machine learning and other AI.

You can teach content management systems, and other intelligent automation platforms, cognitive skills so they can automatically evaluate information and distinguish between the ‘sound and fury’ that, in reality, signify nothing.

It also helps you evaluate loss and engineer risk. Workers’ compensation, for example, may have extremely high losses in a certain area. By being able to pick those insights out, systems can identify the commonalities in those claims and insurers can advise their clients on how to mitigate those risks—installing handrails where there are lots of falls, for example.

Part of writing successful business is understanding what’s significant behind a general liability class code. With property loss, at least that is finite. Where you need data even more is for losses that don’t have limits—when it comes to liability, you can be sued for any amount.

With access to intelligent automation, will people skills remain relevant?
There will always be a need for the human element—especially with respect to more complex pieces of business. Being able to trust and rely on data from automated systems will require underwriters to work not just with their intuition, but also now to have the confidence to change their process. They have to understand their biases, know when to challenge them and accept new ways of doing things.

COVID-19 forced people to make changes and break out of their patterns. Culturally, some of that change is going to come from older underwriters working with younger digital-first employees, with each influencing the other. It’s been encouraging to hear from insurers about the way their underwriters have realised how much technology can improve the quality of their work environment.

What do you hope attendees will take away from your panel?
We have been in a soft market for a long time. In this new hardening market, underwriting is going to be your competitive advantage. It’s time to look differently at the discipline because it could prove to be your secret sauce.

Eileen Potter will be speaking at Intelligent Insurer’s Underwriting Innovation Europe Virtual Event (June 28–30, 2021). The event is free to attend for insurers and brokers/agents, but you must register in advance. Sign up to access the content live and on demand here.