3 Signs Your Underwriters Are in Trouble

Fortunately, technology is maturing just in time to respond to common challenges, allowing underwriters to refocus their time on what they do best. 

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Underwriters spend up to 40% of their time on non-core and administrative activities like re-keying and manual data entry. 

As a result, many underwriters fail to service all the requests for coverage they receive. Time and energy that could be allocated toward more meaningful activities — like improving broker interactions, effectively pricing risks and winning new business — is wasted due to redundant, manual processes and inflexible systems. 

Brokers grow frustrated when they don't hear back from underwriters in a timely manner. Likewise, low-value activities often take time away from more thoughtful risk analysis — ultimately leading to poor risk selection and portfolio management. 

In a business environment where time is one of your organization’s most valuable assets, process efficiency is a top priority. But technology is maturing just in time to respond to common challenges in the underwriting world, allowing underwriters to refocus their time on what they do best. 

A day in the life of an underwriter 

As an underwriter, your first task of the day is to wade through your inbox and identify the risks worth opening — you’re looking for a profitable needle in a haystack of emails. An hour later, you’re 80 pages deep in the first risk you’re analyzing when you realize the broker failed to flag that coverage is needed for something your reinsurance doesn’t handle. 

So, you pass on that risk, meaning a wasted hour on your end. Although you’re frustrated, it’s still early in the day so you shake off the error. Things are looking better as you start reviewing the next risk in the queue, until you discover this broker also made a key oversight — they failed to include the engineering report on the request's most important asset. 

While waiting for a response on that information (which takes another hour), you pull up the rest of the applicant’s information and documents, which includes miscellaneous web forms and Excel spreadsheets. When you enter the applicant’s information into your workbench, you receive a clearance error because you mistyped the name of the cover and misplaced a decimal point when inputting the rebuild value. You contact another broker to resolve these issues and get an out-of-office email in response. 

Before you know it, your day is over — and you’ve failed to move forward even a single risk. Not only is your own work incomplete, but you haven’t had a chance to respond to brokers on other potential business opportunities. 

While this example is a worst-case scenario, it’s not far off from an average day for underwriters. Frankly, underwriters have struggled to service the volume of requests they’ve received over the past few years in a soft market. So how will underwriters cope in today’s hardening market — with submission volumes multiplying — where brokers are searching high and low to find capacity?

Scaling to meet these insurance challenges isn’t achievable via traditional methods like increased headcount and expense bases. You need technology intervention to close the gap. 

See also: 2022 ITL Yearly Wrap Up

Outdated technologies and inflexible systems undermine your underwriters’ success

Inefficiencies are all too common in underwriting. With loads of important information buried in disparate documents and forms — and processes that make it difficult to navigate business needs — underwriters are simply not set up for success. 

If your technologies and processes are weighing you down, consider whether the statements below apply to the underwriters at your organization. If so, it’s time for a tech upgrade. 

1. Disjointed data limits automation and efficiency. Your underwriters manage and extract data from siloed and often complex sources like medical reports, policy documents, applications and survey reports. The lack of standardization makes it difficult to automate data extraction, so you rely on time-consuming and costly manual data processing efforts. 

As a result, underwriters spend too much time sorting through, keying and compiling data. They lack time to respond to brokers in a timely manner, which damages the customer experience and causes underwriters to miss out on new business opportunities. The ability to respond swiftly to brokers is often the key to winning more of the business you actually want to write — and digitizing this process relies on clean and accurate data lifted straight from broker submissions. Support your underwriters with technology that facilitates accurate automation, regardless of inconsistent data formats. 

2. Underwriters can’t access the right data at the right time. Do your underwriters waste time waiting for answers and documents? How much time do they spend analyzing a risk before they identify a red flag or a treaty gap that prevents them from writing the risk? Without the right data at their fingertips, the insurance application drags on, wasting time and resources. 

At the same time, underwriters grow frustrated because they would rather spend time on initiatives that add value to the business instead of waiting for information and answers that may never come. Underwriters require technology that provides access to accurate data so they can maintain efficient processes and reallocate the time they would spend waiting around to more strategic initiatives. 

3. You lack confidence in your risk assessment and pricing. Human error is inevitable if your organization relies on manual processes. An underwriter or actuary can easily miss a key data point hiding in an Excel spreadsheet cell or enter duplicate data — especially when trying to quickly replicate loss runs that are baked into a PDF. With human error likely, it’s important to build additional steps into your process that help check (and then double check) inputs. 

See also: Why Underwriters Don’t Underwrite Much

To more accurately price risks and reduce losses, your underwriters require tools that provide easy access to each piece of relevant information — and that data must be captured accurately. Without a digital repository of information to draw insights from, underwriters are left to rely on experience and gut feelings, with no way to systemize insights, eliminate cognitive biases and pinpoint poorly priced risks in the market. And there's no point in investing in data augmentation if it’s being appended to an inaccurate or incomplete record.

If you aren’t sure where you stand with your current technologies, the most important step is to listen. Survey your underwriters, gather and analyze the results and determine how to proceed from there. To keep conversations aligned on your overarching business needs, center discussions on strategies to achieve scale and automation in an industry that’s filled with deep expertise and built on human relationships. 

You’ll find that the right technology won’t replace or automate the role of the underwriter — it should empower them to focus on bringing more value and revenue to your business.

Chris Mullan

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Chris Mullan

Chris is Mullan is the principal product manager for Eigen, responsible for driving forward the capabilities of Eigen's platform to resolve the challenges its clients face in generating actionable insights from data and documents.

Mullan joined Eigen with 12 years of experience as an actuary and management consultant specializing in the insurance industry, and before joining Eigen was head of AI for financial services at Monitor Deloitte.

Tim Crowe

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Tim Crowe

Tim Crowe is Eigen's director of insurance solutions and is ultimately responsible for driving the implementation of Eigen's award-winning NLP and computer vision solutions across the insurance landscape.

Crowe was most recently SVP of underwriting at Canopius, after previously holding senior roles for Core Specialty, StarStone Insurance, ProSight Specialty and NYMAGIC.

Crowe has an MBA from the Leonard N Stern (NYU) School of Business with specialization in business analytics.

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