Tag Archives: risk data

The Next Step in Underwriting

When a person applies for a mortgage in the U.S., credit reports are pulled from all three bureaus — Equifax, Experian and TransUnion. Why? Because a single bureau does not provide the whole story. When you’re lending hundreds of thousands or millions of dollars it makes sense to find out as much as you can about the people borrowing the money. The lender wants the whole story.

When you’re underwriting the property, doesn’t it make sense to get more than one perspective on its risk exposure? Everyone in the natural hazard risk exposure business collects different data, models that data differently, projects that data in different ways and scores the information uniquely. While most companies start with similar base data, how it gets treated from there varies greatly.

When it comes to hazard data there are also three primary providers, HazardHub, CoreLogic and Verisk. Each company has its team of hazard scientists and its own way of providing an answer to whatever risk underwriting and actuarial could be concerned with. While there are similarities in the answers provided, there are also enough differences — usually in properties with questionable risk exposure — that it makes sense to mitigate your risk by looking at multiple answers. Like the credit bureaus, each company provides a good picture of risk exposure, but, when you combine the data, you get as complete a picture as possible.

See also: Next Generation of Underwriting Is Here  

Looking at risk data is becoming more commonplace for insurers. However, if you are looking at a single source of data, it is much more difficult to use hazard risk data to limit your risk and provide competitive advantage. Advances in technology (including HazardHub’s incredibly robust APIs) make it easier than ever to incorporate multi-sourced hazard data into your manual and automated underwriting processes.

As an insurer, your risk is enormous. Using hazard data — especially multi-sourced hazard data — provides you with a significantly more robust risk picture than a single source.

At HazardHub, we believe in the power of hazard information and the benefits of multi-sourcing. Through the end of July, we’ll append our hazard data onto a file of your choice absolutely free, to let you see for yourself the value of adding HazardHub data to your underwriting efforts.

For more information, please contact us.

Next Generation of Underwriting Is Here

Have you ever seen footage from old auto shows that showcase the “car of the future”? It always seems to be some sleek looking vehicle slowly spinning on a turntable, and everyone at the show can’t wait to get one. Examples from past eras include the Cadillac Cyclone, Ferrari Modulo and Ford Nucleon.

Only problem is, those concept cars never get built. Some features may get incorporated into production vehicles, but, in reality, that shining vision of the future never materializes.

Some people see underwriting technology the same way. “Sure,” they say, “the features and functionality of a modern underwriting system sound really cool, but the promise of underwriting technology that truly transforms business results is just a fantasy.”

See Also: The 5 I’s of Underwriting 

In reality, the next generation of underwriting technology is already here. It’s in production, it inspires real business value and a good number of forward-looking insurers are enjoying the ride!

Property/casualty insurers are more engaged than ever in innovation initiatives, and strategy meets action (SMA) research ranks underwriting as one of the most highly targeted areas for investment. That’s because today’s underwriting technology—especially in the form of dedicated underwriting workstations—is actually delivering on the promises of data-driven, workflow-optimized risk evaluation processes. Underwriting workstations are streamlining the underwriting process, making underwriters more efficient and helping to increase collaboration with producers. And, most importantly, underwriting workstations are giving underwriters access to a host of data and tools for better risk decision making, all while lowering loss ratios and driving profitability.

Underwriting is often referred to as the engine of property/casualty insurance. The more underwriting operations are consistent, optimized and streamlined, the better the outcome. As insurers look to innovation strategies to advance their businesses, SMA’s outlook on industry trends indicates that underwriting workstation technology is playing a vital role in reshaping the underwriting process. Underwriting workstations stand out as a winning innovation investment because the real-world experiences of insurers that have already embraced the technology are a solid indicator of the benefits.

Today, insurers continue to face challenges with legacy underwriting processes. From long processing and turnaround times to agent and underwriter communication delays and manual or paper-driven workflows, operational pain is often a standard fixture in conventional underwriting. Such restrictions actually discourage an environment for innovation, keeping underwriters from what they are meant to be doing: making the best possible risk evaluation decisions, as quickly as possible.

The business and technology justifications for investing in advanced underwriting technology are plentiful. In fact, insurers are investing in modern underwriting technology and data environments as a foundational layer for business transformation. It is increasingly possible to make smarter, more informed risk evaluation decisions by using responsive, dedicated underwriting workstations that are connected to new sources of data and predictive models. The ability to access, assemble, manipulate and interpret risk information from a centralized, connected system is creating new opportunities for better and more consistent underwriting.

More than ever, insurers are able to leverage modern underwriting workstations to offer the best coverages or exclusions at the right price. Those insurers with underwriting workstations in place have seen high returns on their investment. They experience growth in direct written premium, improved quote efficiencies, accelerated submission appraisal and see a boost in risk assessment productivity.

Underwriting workstations sharpen the focus on actual risk evaluation, eliminating low-value tasks and the need to hunt for information. The solution increases the level of consistency, discipline and knowledge-sharing across the enterprise, through built-in rules, check lists and required supporting documentation before an application is allowed to move forward.

Insurers may have aging technologies that perform key functions satisfactorily but, at a minimum, mandate underwriters access multiple systems (CRM, policy, billing, claims, loss control, etc.). The deployment of underwriting workstations insulates underwriting teams from having to maneuver in multiple systems to fulfill their tasks. Instead, data from diverse platforms can be made available to underwriters in the single, stable user interface of the underwriting workstation.

It is a popular notion that policy systems alone can efficiently support the underwriting workflow. But the need for increasingly complex and data-driven risk evaluation precision—particularly by commercial and specialty lines insurers—indicates that a more sophisticated underwriting technology platform is required. Indeed, underwriting workstations can have the highest value when integrated with modern policy systems. The combination establishes a strategic and scalable enterprise platform, adding previously unattainable capabilities such as multi-line proposal workflows, full insured/account views and team-based underwriting.

See Also: AI’s Huge Potential for Underwriting

Workstations also give agents and brokers access to the full underwriting process, making for easy collaboration and faster turnaround times. Producers and underwriters can share documents, notes and e-mail, providing real time visibility into the submission process for new business, renewals and endorsements.

With underwriting workstations, managers gain support for regulatory and compliance requirements with systematic audit trails, and executive management gains deep insight around entire books of business. The organization also gains new strategic capabilities such as multi-line, account-based underwriting and becomes positioned to rapidly scale and expand products or lines of business.

As data sources predictably grow and become more available, underwriting workstations allow insurers to leverage new sources of risk information. SMA research shows that more than 50% of property/casualty insurers are currently using data and analytics for underwriting and risk management, with more than 10% piloting data and analytics solutions and 25% planning to use those solutions in the next three years. The research indicates an increased reliance on varied and external data—such as geospatial models, catastrophe models, telematics and other sources—to support underwriting decision making, and it is helping increase profitability by eliminating risks that may currently be indiscernible in the underwriting process.

While the ability to fully incorporate new data into business workflows continues to evolve, one key imperative for insurers is to improve their technologies and tools in a manner that informs and improves the underwriting process but does not further overburden underwriters with having to locate and integrate risk data. Insurers that capitalize on analytics in risk decision-making are able to accelerate growth and improve profitability. Therefore, data and analytics capabilities must be integrated within the underwriting workflows, and they must provide contextual analytics based on the risk being evaluated by the insurer. Underwriting workstations facilitate integration of multiple data sources and analytics, and they provide context based analytics at the point of the underwriting decision.

So when insurers are looking for next generation technology to improve underwriting efficiency and boost the precision of risk evaluation, they don’t have to wait or compromise. Unlike those concept cars of the future that never see the road, underwriting workstation solutions are already here and are tearing up the tracks.