Where are the robot underwriters?
There’s no hiding anymore – the robots are coming to the world of insurance. But while insurance has traditionally been quite reluctant to adopt new technologies – being a risk-averse industry to the core – InsurTech is now sufficiently mature that it’s piquing interest.
“Perhaps traditional insurance lines in marine, aviation and transport have not needed to innovate in the data and analytics space to the extent of higher volume and more homogeneous lines,” says Robin Patterson of Charles Taylor. It is worth noting that Charles Taylor now has an entire organisation dedicated to InsurTech.
“With overcapacity squeezing margins and a high cost of doing business, efficiency savings and pricing insights may now appear a more attractive means to protect the bottom line.”
It’s the pricing and underwriting side of firms that are set to feel the impact of InsurTech first, and with good reason. Underwriters can typically take 4-5 days each month delivering MI to the business; often, they’re using data that is inaccurate, either through legacy systems, lack of comprehensive data validation, or human errors in input.
An underwriter spends 48-60 days underwriting each year. So, when you consider the cost of that high-value employee delivering inaccurate MI for strategy decisions on the back of bad data, you can see why automation and accuracy are becoming essential to firms seeking cost efficiency.
In this report, we will look at the role of the underwriter in this new world, and the need for those underwriters to be working with better data. The thing to stress is that yes, automation is coming, but short-term thinking will not help here.
Companies must think of the long-term impacts and strategies that can be brought by embracing automation and freeing up talented staff to tackle the bigger picture.