New rules of the road in Underwriting – E&Y Research
Article Synopsis :
There is no doubt that digital advancement presents a great opportunity for insurers to leverage technology, data and analytics to achieve underwriting excellence. So where should insurers invest in the next few years to improve the accuracy, precision and effectiveness of their underwriting function?
In the research paper “Insurers are applying new rules of the road in attacking underwriting“, the E&Y team highlight five recent underwriting trends with potentially positive implications for insurers seeking to boost performance and explain how they can be more innovative in underwriting. The E&Y team believe that forward-looking insurers can increase profitability and generate business value through refreshed underwriting and pricing operations leveraging the following five underwriting trends:
- Real time becomes the rule
- Data and analytics get predictive
- Reducing risk with rules-based systems
- Getting personal with Millennials
- Distribution goes digital
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Digital Insurer's CommentsThe rise of digital channels is generating huge amounts of actionable customer data that can empower underwriters with analytical insights to improve pricing and risk evaluation.
Even though most insurers acknowledge that ‘data is king ’, one of the most critical business challenges they face today is the lack of capability to capture and analyse this data effectively. Even the most advanced insurers struggle with siloed, disparate and non-integrated systems which are ingrained in their operational infrastructure.
We believe the solution lies in developing data-oriented capabilities using technology to make underwriting simple, intuitive and real-time. It’s crucial for insurers to start building next-generation underwriting platforms that are:
- Predictive (asks less questions)
- Near real- time (less complex, enhances customer experience) and
- Omni-channel (available anytime and anywhere)
Leading insurers must work to develop these new and enhanced capabilities for assessing and pricing and placing insurance risk in order to stay competitive.
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