Technological advancements are revolutionizing the insurance industry, particularly in the underwriting role. Automation is at the center of this transformation, as carriers, managing general underwriters (MGUs), and agents strive to keep up with rapidly evolving technologies. The traditional underwriting role is shifting, requiring new skill sets and attracting technologically trained talent such as data scientists and developers.
Underwriting is becoming increasingly technology- and data-driven, departing from the practices familiar to insurance veterans. In the past, underwriters had to gather data from multiple sources, each with its own format, and interpret it from different reporting platforms. Today, insurance organizations are seeking technology that can compile and analyze data from various sources, enabling faster decision-making on risks. Consequently, underwriters now require the ability to quickly understand data platforms and process information efficiently.
The emergence of artificial intelligence (AI) and machine learning has further transformed the underwriter’s role. These technologies are automating the identification of ineligible risks, allowing underwriters to concentrate on worthwhile risks. AI tools can automatically assess risk applications, eliminating the need for manual processing and review. This shift has redefined the necessary skill sets for underwriters, enabling them to build specialized expertise in understanding and tailoring risks, pricing, and coverage.
Veteran underwriters may wonder which specific technologies they should master in order to embrace the changing landscape. However, it is impractical to expect underwriters to learn every emerging technology, as each carrier or MGU often develops its own proprietary solutions tailored to its specific needs. Instead, underwriters should focus on understanding the impact of technology on their role and seek a broader understanding of how technology and data can be utilized to predict and prescribe.
Technology is not a standalone solution; it serves as a tool alongside talent to enhance risk analysis and increase profitability. Underwriters should anticipate technology playing a pivotal role in their jobs, facilitating data processing and risk assessment. This marks a significant transition, as underwriters historically had complete control over risk assessment and decision-making. The abundance of data available will be too vast for one person to grasp, necessitating the utilization of technology to process and interpret it effectively.
Perceptions of technology as disruptive should be addressed, as this new era of insurtech is already underway. MGAs and carriers are investing in technology platforms that leverage data as a strategic asset, and new generations of underwriters are being hired with this enhanced technological focus in mind. Veteran underwriters must adapt and remain flexible in the face of technology’s impact, adopting a data-minded approach to assessing and underwriting risks.
In conclusion, technological advancements are reshaping the underwriting role in the insurance industry. Automation, AI, and machine learning are streamlining processes, enabling underwriters to focus on more valuable tasks. The industry demands a broader understanding of technology and data utilization, and underwriters must adapt, remaining flexible and open to new approaches. By embracing these changes, underwriters can enhance their capabilities and contribute to a more efficient and profitable insurance landscape.
