How to empower commercial Insurance underwriters through Digitization
An increasingly competitive marketplace implies the need for differential underwriting and pricing assumes critical importance. The Underwriting process involves multiple levels of data crunching and assessment at the risk and overall portfolio level. These include gathering core information from the prospect, collating past experience from the carrier and multiple external bodies, leveraging field surveys and more:
Figure 1: Underwriting Lifecycle
Underwriting is more than a science. It is a strategy around target market, vetting processes, evaluation criterion and pricing (both experiential and predictive modeling). It also needs consistent evaluation of portfolio to enable risk accumulation and capacity management. In short, there is no one strategy/simple rule that fits all risks/scenarios.
While having a well thought out pricing strategy is the need-of-the-hour, most Underwriters seem to be caught up in the mundane tasks of cleaning up the data, getting them in the right format, processing them through models and many more systems to arrive at the right pricing.
This raises the question, have we really empowered the Underwriter to enable effective Underwriting? What does it take for the Underwriter to truly perform his duties effectively and efficiently? What does Digital Underwriting involve:
- Digital Underwriter should be empowered to perform automated submission pre-processing based on pre-defined criteria.
- Entire submission process namely risk, location and financials should be digitized. In most cases, these remain in physical form or unstructured data.
- Need to enrich the risk with prior experience and external data sources, minimizing the required research every time.
- Integrate risk evaluation with multiple modeling engines for CAT and Non-CAT risks with single input of exposure.
- Perform comprehensive pricing using a combination of catastrophe (CAT) modeling, predictive modeling and experiential pricing. This includes using micro pricing segment and varied data points about risk, customer, business environment, current exposure, UW capacity, financial and so on.
- Digital policy documentation.
- Continuous portfolio analytics with real-time exposures to define next-best business action including business and pricing strategies driven by risk diversity.
Figure 2 Digital Underwriting – Empowering the Underwriter
Mindtree has enabled the transformation of several commercial and specialty carriers by way of the following:
- Offering end-to-end expertise of business segments/functions and products with codified knowledge via accelerators
- Replacing Schedule of Values processing, a time-consuming process for Underwriters, with Robotic Process Automation
- Making proprietary Insurance frameworks available like Product Factory*, Inspect Mind, Decision Moments, InSocial, ShotClasses, ConnecTile*, Ray* and XactConnect
If you would like to leverage our knowledge around digital underwriting and how we can enable your digital underwriting process, write to us at firstname.lastname@example.org.
*Product Factory: Framework to reduce cycle time for product launch
*Ray: Indoor geo positioning solution for Risk Management
*ConnectTile: Framework providing intelligence to be able to target specific customer segments