Perhaps the most widely used tool in an underwriter’s toolbox – and the greatest source of frustration – is the underwriting workbench. The majority of underwriting workbench solutions date from the digital stone age – the 1990s or early 2000s – and exist in the form of spreadsheets and basic business intelligence (BI) tools. Slow, inflexible, incomplete, and cumbersome, these legacy solutions haven’t kept pace with the evolving role and needs of the modern underwriter. In this article, we identify the key capabilities of a modern underwriting workflow solution.
When you think of a ‘workbench,’ what image first comes to mind? For me, it’s my dad’s basement workshop with all his tools neatly arranged on pegs and at the ready for whatever DIY project or home repair job he had to tackle next. This was the original idea of the underwriting workbench, transported into the digital era and conceived as software: a solution that would provide underwriters with all the tools they needed to do their work all in one place. But that was a long time ago and a lot has changed in our industry.
The reality today is underwriters and teams today must tab through dozens of different screens to find the data needed to price a risk, rekeying the same information over and over again into multiple applications. The underwriting workbench has become just another open tab in an endless and ever-growing line stretching across the top of the underwriter’s screen.
The traditional underwriting workbench is entirely inadequate for assessing today’s dynamic, volatile and complex risks. Workbenches are challenged to support the high volumes of dynamic data – both internal and third-party – now required to evaluate and price a risk. Over the course of 1,200 hours of interviews, countless underwriters and operations staff told us about having to go for a walk or grab a coffee while waiting for the data they need to load in their workbench. These periods of downtime add up in a day, eroding productivity and preventing staff from focusing on high value tasks like advising brokers, agents, and policyholders, and writing more business. For busy underwriters, yesterday’s technology has become today’s frustrating burden.
According to a survey conducted by EY and CPCU, underwriters are no longer “just” underwriters: “Whereas risk selection and pricing were once the primary activities, today’s underwriters are more likely to serve as: Sales executives, Decision Scientists, Customer advocates, and Innovators.” The survey found that “most insurance companies face considerable gaps between current capabilities and the requirements for a broad-based and high-value transformation of the underwriting function."
McKinsey has identified providing employees with “a suitable physical and digital environment that gives them the flexibility to achieve a work–life balance” as a key factor in employee satisfaction and talent retention. The right digital tools “free people up to focus on the more creative and engaging aspects of their work.” A key question when considering underwriting transformation and modernizing core systems is: “Does your company’s technology enable underwriters and operations staff to work efficiently and without friction?”
Frustrated by poorly-designed legacy or homegrown tech and tooling, as well as mundane manual processes that consume too much of their time, underwriters and staff feel under-supported and overwhelmed. In most cases, they are forced to create their own bespoke solutions to work around the daily obstacles they face as a result of the enterprise solutions available to them. Facing burnout and stress, even experienced underwriters are jumping to more digitally-capable carriers, challenger MGAs, and insurtechs – or leaving the profession altogether. A study by McKinsey found that 65% of those who resigned from a job in insurance between April 2020 and April 2022 left the industry entirely. This is a perfect storm for insurers who depend upon skilled underwriting talent to drive future revenue and growth, and who are already struggling to attract and retain talent.
These challenges can’t be solved by simply bolting on new capabilities to the traditional underwriting workbench – many would argue we’re not even using bolts; more like chewing gum, duct tape, and hope. Rather than building a better mousetrap, we need to go back to first principles and rethink the underwriting experience from the ground up to make underwriting more unified, efficient, precise, and painless. This will require a radical reimagining of what an underwriting workbench or underwriting desktop could and should be. Insurers need to take a human-centric and empathetic view of the daily obstacles facing their underwriters and operations staff, and invest in modern solutions that transcend the limitations of traditional workbenches and empower underwriters to make better risk decisions and “get sh*t done.”
To get to the root of the challenges underwriters face every day, we have conducted thousands of hours of interviews – and counting – with underwriters, actuaries, and insurance executives to identify the key points in the process where and when they want information presented to them and how all the pieces can come together across an organization.
What we heard across the board was that underwriters, regardless of age or experience, have zero patience for slow, clunky, outdated tools that hinder rather than help them do their work. As one underwriter at a Fortune 500 US P&C Insurer told us, underwriters, and especially younger ones, “are looking for more efficient and more visual systems.” They want – and feel as though they deserve – the same data-driven digital ease in their professional lives as they are used to in their personal lives. They also have a genuine desire to understand what their peers are doing, and to act in the best interests of the business and their clients.
Below you’ll find a list of the key capabilities that underwriters told us they desperately want and need in a next-generation underwriting desktop:
Portfolio Management – When you’re heads-down at the account-level, it’s easy to lose sight of the bigger picture. Help me tame my work queue by automatically triaging business based on appetite, winnability, strategy, and underwriting guidelines. Embed portfolio strategy and guidance directly into my underwriting workflow so I’m not flying blind. Dynamically optimize my queue by surfacing real-time feedback on appetite and winnability so the best business to write automatically floats to the top. Prompt me with the data I need to make decisions in the broader context of organizational goals and strategies.
Real-time Risk Data & Insights – Deliver actionable data and risk selection guidance in the context of each of my accounts. Seeing the data and having it in a single place is one thing, but knowing what it is telling me to do in the context of my entire portfolio at any given point in time is really powerful. Show me the “So what?” that helps me understand how to use the data to ‘outselect’ the competition and win more business.
A Unified Underwriting Workflow – Remove the burden of mundane administrative tasks like filling out uDocs, rekeying data, and hunting for risk data and underwriting guidance so I can focus on high value tasks where I can use my judgment and experience like negotiating and advising clients.
A More Visual Underwriting Experience – Let me understand at a glance relevant data such as risk accumulation, high risk or underperforming geographies, and industry results by line of business using heat maps, dashboards, and other visualizations that “show don’t tell” me the actions I should take based on based on my organization’s specific rules, goals, guideline, and strategy.
Single Pane of Glass – Finding the data and guidance I need to assess and price a risk shouldn’t be a scavenger hunt. Bring all the relevant internal and third-party data – Planck, Relativity6, HazardHub, Groundspeed, etc. – into a single pane of glass so I can quickly tap into it to make better risk decisions. More data isn’t necessarily better. Make it easier to digest and dynamically update it in my queue so I don’t have to spend hours a day hunting down and manually sifting through mountains of information, validating data, and wrestling with internal tools.
Give me these new tools yesterday! – I keep hearing about underwriting transformation but real changes to my day-to-day take forever to happen: “ Things will improve when we roll out that new Policy Admin or CRM system in, oh, 2 or 3 years…” Seeing is believing, and I’m getting tired of waiting.
Underwriting has always been the lynchpin to profitable growth for insurers. Whether you’re an established carrier, an MGA, or a new market entrant, there is a strong business case for removing friction from the underwriting workflow. While underwriters have more data and tools at their disposal than ever before, the reality is much of the underwriting process continues to be highly manual. Today, vital information needed to assess a risk is spread across a wide variety of web-based applications and databases. Underwriters today are not swimming in data – they’re drowning.
The wish list of capabilities desired by underwriters isn’t pie-in-the-sky. With the advent of AI and machine learning, insurers have powerful new tools to turn vast amounts of data into actionable insights in real-time, but they are hampered by a highly manual underwriting workflow and inadequate tools that haven’t kept pace with new technological developments, the evolving role of the underwriter, or the changing needs of insurance customers.
When it comes to modernizing core systems and replacing antiquated underwriting workbench solutions, the stakes are high. According to a Deloitte Center for Financial Services report titled “The Rise of the Exponential Underwriter”:
“Insurers that continue relying on traditional ways of underwriting could start a negative spiral that would be difficult to reverse. They may face adverse risk selection, could drop off preferred lists of distribution partners and may have a more difficult time recruiting and retaining skilled professionals.”
The future of insurance will be all about digitally enabling underwriters and teams by shifting from static systems of record to dynamic systems of action. When insights and information are allowed to exist as data and functions contained in software rather than relegated to spreadsheets and PDFs, they can be used proactively and in real-time to empower underwriters to balance their portfolio, and grow premiums in accordance with the rate, retention, and accumulation goals and strategies you set for your business.
Empowering underwriters and teams with the right data and solutions will not only improve underwriting outcomes, but help you attract and retain the talent needed for future growth.
For the latest intel and key findings from over 1,200 hours of in-depth interviews with underwriters and insurance executives on the market drivers for underwriting transformation, check out our P&C Underwriters’ Guide to RiskOps. Get your complimentary copy here.