New underwriting guide includes key findings from 1,200+ hours of in-depth interviews with underwriters and insurance executives on the technologies and tools insurance carriers and MGAs need to assess complex and emerging risks.
Speaking at InsureTech Connect (ITC) 2022, the world’s largest gathering of insurance leaders and innovators, Bill Pieroni, CEO of ACORD Solutions Group flagged a lack of innovation and investment in underwriting as a bothering trend: “We need more focus on the core of insurance – particularly underwriting, rating and pricing – and gathering that data from meaningful insight in order to understand what you’re underwriting,” Pieroni said.
In a recent underwriting guide published by Federato, Megan Bock Zarnoch, the company’s Chief Operating Officer expresses this concerning industry trend in more human terms:
“In my 20+ years in the P&C Insurance space, I’ve seen countless companies use band-aids and bubble gum to hold together the systems where underwriters transact business. New projects to build transformative solutions, often mean timelines of five+ years and costs climbing upwards of 9 figures. Finish lines feel unreachable, and the results are not good. Fatigue from constant change that doesn’t align to the way work actually gets done is common. Put simply, life for underwriters today is a grind.”
– Megan Bock Zarnoch, COO, Federato
Despite massive investments in third-party data and new predictive models, P&C and Specialty insurance underwriters struggle to precisely assess and price complex and emerging risks. While underwriters today have unprecedented access to data, they continue to be bogged down by routine, mind-numbing manual tasks and processes that computers can do better and faster. The rapid proliferation of data sources and web-based applications has created more chaos than clarity for front-line underwriters who need dynamic, easy to digest data at their fingertips. While digital transformation initiatives have focused on automating away manual tasks, underwriters continue to feel overwhelmed – not empowered.
To understand what is at the root of this issue, Federato conducted thousands of hours of interviews with underwriters and insurance executives. The goal was to understand at a deep level how front-line underwriters work and how they think. We asked about their real-world frustrations with their current workflow and what they need to be more efficient, successful, and satisfied in their roles. As we spoke with underwriters and operations teams, a few common themes became clear:
In The Underwriters’ Guide to RiskOps, we share the key findings from this first-hand research and discuss how leading insurers are transforming the underwriting experience and out-selecting their competition by aligning portfolio management with underwriting action.
The insurance professionals surveyed represent a broad and diverse cross-section of the P&C and Specialty insurance market – from Top 10 global P&C insurance carriers to established MGAs and new market entrants. Here’s a sneak peek at some of the diverse voices and perspectives you’ll find in the guide:
“The real challenge is not how do we move from paper to bits, but how do we actually streamline and improve our core processes to make underwriting not only more efficient but also smarter?”
– Stacey Brown, Head of Global Technology Innovation, AXA XL and Founder, InsurTech Hartford
“Everything I can do to help my underwriters take into account the company’s portfolio is huge.”
– Director & Sr. Underwriter, Global Top 10 P&C insurer
“Younger underwriters are looking for more efficient and more visual systems.”
– Underwriter, Fortune 500 US P&C Insurer
“The insurance industry is using yesterday's information and skill sets to solve today's problems. Federato's RiskOps solution brought us a whole different way of looking at an industry that has tons of data but struggles with how to appropriately use and integrate it.”
– Steve Doucette, CEO and Founder, Hawaiian Hurricane Group | Hyundai MGA Partner
With the emergence of AI and machine learning, insurers have powerful new tools to improve underwriting efficiency and performance. Of course, technology is only part of the equation – people, process, culture, collaboration, and openness to change are all part of a successful digital underwriting strategy. In the guide, we make the case for a human-centric approach to underwriting transformation: rather than replacing underwriters, successful digital transformation initiatives will augment their traditional strengths, talents, judgment, and creativity.