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How Connected Underwriting is Changing Insurance (Gijsbert Cox)

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Insurance underwriters are currently spending
40% of their time
on non-core activities. That’s a major issue as companies, particularly in the current climate, don’t have resources to bankroll needless inefficiency – nor should they want to. It’s a challenge that could hit underwriters to the tune
of up to $160 billion over the next five years. 

The inherent complexity of the role of an underwriter is part of the problem. There are many moving parts that all have to be coordinated, and different sources of data to analyse. That complexity is only magnified for those who have to underwrite multi-country
business. Master policies have to run alongside local policies, which often have to be issued in the local language, local currency, and with local terms specific to that region. All insurers who write global policies have to work with internal and external
partners around the world. That often means different workflows, different IT and legal systems, and different approaches. 

Even for a well-oiled machine, there are a lot of variables to consider. But for many underwriters, although some technology has been introduced to make processes faster, there is room for improvement. Most underwriters have many different systems open on
their computers at the same time, all offering up different sources of data. Conversations go back and forth with brokers via email that are difficult to track. And there is a lot of reliance on manually inputting data, which can be avoided, or at least reduced,
in the age of automation. 

Add to this ongoing skills and people challenges. According to a recent
PWC survey
, 34% of US financial services business leaders name talent acquisition and retention as one of the biggest risks to company growth. It’s the second highest risk, ranked above rising production costs, recession, and supply chain disruptions. The
sector has to attract new talent, as well as backfill senior underwriters leaving the business. The process of onboarding new underwriters is complex and lengthy due to the number of different insurance products and systems that new recruits have to learn.
This only adds to the existing cost of talent acquisition and lengthens the time it takes for them to be proficient enough to carry out their role. 

Technology enables greater insights and analysis.

Many senior insurance leaders  are still managing hundreds of millions of pounds worth of insurance decisions, products, and services on spreadsheets. This approach may have served them for years and probably decades, but these manual processes are ripe
for human errors and inconsistencies that lead to higher risks. And for insurers looking at underwriting more multi-country business, the potential for risk increases with each additional stakeholder involved. These archaic approaches are not an innovative,
scalable solution for an insurance business to expand its operations and grow globally. Furthermore, if valuable data resides in a more dynamic system instead of a static spreadsheet, it can work harder for the business, provide better insights, and make intelligent
suggestions to prompt faster actions.

The good news is we’re starting to see a bigger push towards intelligent, unified technology solutions to address these issues. For example, Gartner predicts low code development tools to reach
$29 billion by 2025, with a compound annual growth rate of over 20%. Digital tools encourage the use of technologies such as artificial intelligence (AI) and automation, which in turn make processes
and workflows smarter, as well as more efficient. 

With technology today, we’re able to create an engagement layer that provides workflow and case management in a single underwriting workbench. This allows you to pull data from internal and external systems like your policy admin system or CRM,  and make
adjustments quickly. Time is of the essence, and underwriters will always want to carry out their work with speed, while maintaining accuracy. However, having the right information on hand is critical to achieve all this. 

Who is the customer? What underwriting guidelines relate to this customer? What advanced data sources can be pulled in to help underwriters more accurately assess the risk? What does the external rating information say? With all of this information living
in the same place, and with all the necessary stakeholders having access so they can collaborate on the project in real-time wherever they are in the world, the underwriter can focus on their main role: evaluating risk. 

That’s the important thing here. The underwriter should always be in control. The aim of this technology isn’t to reduce the amount of agency that an underwriter has. It’s about automating the tedious bits and allowing the underwriter to shine and use their
skills for analysis, rather than admin. 

The low code approach to smarter and faster workflows.

Many insurers hesitate to modernise because of the perceived complexity of rolling out a new system. Off-the-shelf software is often not flexible enough to give a business exactly what it needs, while custom builds can be complicated and costly to implement,
particularly with the many different platforms that need to be coordinated. 

That’s where  low-code technologies can help as they help insurers build powerful apps and workflows 10 times faster with visual design tools that strengthen business and IT collaboration… It’s a way to build software in an accessible way that reduces
the timescales and complexity traditionally involved with creating applications, and at a fraction of the cost. 

Intelligent automation and a unified low-code platform can transform the underwriting process. Underwriters hold a great deal of responsibility when assessing risk, but sometimes they can drown in the  huge amounts of data they have access to. As a result,
the underwriting process can take longer than it needs to.

With an automated system built on low-code technology, underwriters can turn all the data they have into a strength, not a hindrance. They can combine data from multiple disconnected systems and create one single source of truth to automate the processing,
routing, and triage of submissions and exceptions in a controlled manner. 

Making your data work for you.

By using low-code as part of a connected underwriting workflow,  insurers can make the best use of their data without being inundated or intimidated by it. When predictable, repetitive tasks are automated, underwriters are able to spend time on more high
value tasks, enriching their work lives. The work of an underwriter becomes more fulfilling, more efficient and more profitable as a result of using low-code. And with the technology accessible by design, more companies can benefit from it.  

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  • Source: https://www.finextra.com/blogposting/22952/how-connected-underwriting-is-changing-insurance?utm_medium=rssfinextra&utm_source=finextrablogs
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