Expert panel agrees that the use of technology and data is transforming the role of the underwriter and that ‘tech-fuelled’ insurers need to be the norm rather than the exception

Underwriting is “the battlefield that remains to be conquered” by technology in order to transform it from “a mystical art into a data-driven profession”, said Silvi Wompa Sinclair, group head of portfolio underwriting at reinsurer Swiss Re.

Speaking at S&P Global’s virtual European Insurance Conference 2020 this month, as part of a panel discussion titled ‘The role of technology in the post-Covid age’, Wompa Sinclair explained that technology can help underwriters to better access data so that they can become more time efficient.

She added that “our industry has eons and eons and eons” of data, however “we use but a small fraction of it because we don’t know how to access the basements of data that we sit on”.

She continued: “When we look at technology in the insurance industry, it’s clear that it’s done a lot already on the distribution side and also on the claims side of the value chain. Personally, I’m pretty convinced that the battlefield that remains to be conquered is indeed underwriting because underwriting, at the end of the day, is the core business of insurance companies and that is where true profitability does need to come from. There’s just no way of bypassing that.

“Looking forward, for me, it’s about technology helping to turn underwriting, which I think today is still perceived as a mystical art, into a data-driven profession.

“I think utilising technology to pierce through that data asset and making proper insights from it is a key aspect. And, of course, you can always augment that with external insights, but for me, the absolute core that technology will change is fixing the basics in terms of our internal industry data.

“Secondly, I think technology can do so much for underwriting in terms of the workflow of underwriting, so how does technology help underwriters make the right decisions? Helping with the information that they actually have accessible at the time of their decision.

“Many of the underwriters that I speak to on a daily basis tell me they spend 90% of their time reconciling data or looking for data rather than actually making the analysis and being able to pull decisions off of it. So, helping with that and making underwriting a time efficient profession, I think, is a major other contribution.”

This view was supported by fellow panellist Andrew Yeoman, chief executive and co-founder of Concirrus.

He agreed that the role of the underwriter is changing thanks to the use of technology and data.

He said: “What that means for underwriters is the nature of their work has changed. No longer are we working on researching individual risks and trying to assess an individual risk so much, as looking at the whole portfolio.”

Yeoman added that “tech-fuelled insurers will be the norm” rather than the exception, and that this development is “non-optional”.

Talent gap

Alongside this development in the use of technology and data, however, is the requirement for skilled insurance staff who want to utilise these advancements and know how to make best use of them – here, Wompa Sinclair said there is a talent gap.

In part, this is an area that the insurtech market is filling, as these businesses seek to target current protection gaps within the sector.

Wompa Sinclair added that insurtechs are brilliant at breaking sections of the market down into smaller pieces, enabling them to “move things forward quickly” and focus on “one thing and do it really well”.

With this in mind then, incumbent insurers need insurtech businesses in order to utilise better technology than they currently have, Wompa Sinclair said.

Technology focus

For Mark Bloom, global chief information officer at Aegon, insurance businesses need to start thinking about using the cloud – although implementing this functionality can include some heavy lifting and expense up front, he added that once installed, insurers can then reap the benefits of the cloud, such as speed.

However, Nigel Walsh, partner at Deloitte, said that recent technology trends have been around for a while – instead of necessarily constantly searching for innovation, businesses need to better deploy the technology that is available today and use it to scale.

He noted that, for him, there is also a distinct lack of “revolution” within the industry, as many firms are just digitising their “old” processes. He believes that organisations should “join the dots in a different way” to help insurance staff perform “meaningful” rather than “manual” work.

Walsh added that he has seen a “massive growth” in the use of platforms and that the shift from primary carrier to reinsurer is underway, as companies like Tesla offer insurance alongside their products when selling to customers.

The panel discussion was chaired by Raphael Zindi, product manager at S&P Global Market Intelligence.