(Editor's Note: Part 2 of 2. The previous installment covered the background for big changes in underwriting. This one focuses on how that could manifest in new roles.)
The underwriter as sales executive
Looking more closely at individual roles reveals specific priorities. Across business segments, sales-focused underwriters can assist in pipeline management, evaluate lead quality and participate in marketing campaigns to increase the cross-sell/up sell opportunities. Thus, carriers plan to direct their technological investments in this direction. Similarly, carriers plan to make data investments around customers and industry as a means to increase premium growth and retention ratios by targeting specific customer and geographic profiles.
The underwriter as data scientist
For the decision scientist role, technology investments will focus on predictive modeling, underwriting workstation/rules automation, while risk exposure, customer and industry top the priority list for data investments.
As underwriters assume these new roles, these investments will help insurers more efficiently and effectively review proposals in the underwriting portal and view premiums, terms and conditions; and leverage analytical capabilities to evaluate their underwriting decisions. Combined focus on rules automation and advanced analytics has the potential to improve loss ratios and overall productivity.
The underwriter as customer advocate
The underwriter as customer advocate is focused on delivering a better experience for agents and customers, coordinating account services and generally seeking opportunities to enhance customer loyalty. As such, carriers will be investing in agent portals on the technology side, with data investments focused on claims, loss control and social media. See figures 8 and 9 Insurers are focused on these areas because they relate to management of losses and increased transparency during claims mitigation. Plus, because of limited investments and capabilities, there is much room for improvement in each of them.
The underwriter as innovator
With respect to innovation, technology investments are likely to focus on business intelligence, predictive modeling and agent portals. Carriers are also interested in investing in data related to risk exposures, customer and industry. Collectively, these investments will help carriers gain insights into industry and buyer preferences and tailor offerings for market niches. Bridging the skills gaps through talent and training
A strong talent pipeline and robust training capabilities are critical if underwriting’s expanded value proposition is to be sustained. In other words, survey respondents recognize that true transformation of the underwriting function requires more than just data and technology investments. The shifting roles also necessitate considerable training and “upskilling” in specific areas, such as communication and relationship building.
These so-called “soft” skills are necessary for underwriters to contribute more value on the customer-facing and human side of he business. But more advanced analytical skills and technological know-how are important, too, especially relative to the increasingly data-driven nature of future underwriting work.
The survey results revealed a number of emerging trends, including:
• During the next 12 to 24 months, the top hiring priorities are for generalists, product specialists and segment specialists. Therefore, the majority of training efforts will also focus on these areas.
• The majority of hires are expected to be millennials and members of Generation Y.
• Carriers expect to hire mainly from college campuses and other insurance companies, though carriers specializing in personal lines are more open to hiring from outside the industry.
• Training will be delivered on the job, as well as through a combination of internal classroom settings and internal web-based sessions.
The bottom line
As insurance companies look to upscale their underwriting capabilities and cultivate new skills in their underwriting units, they must recognize the unique transformation challenges they face. Some of these challenges are related to the profound nature and extensive reach of the changes to come. Conventional wisdom has long held that underwriting is at the core of the insurance business. Its evolution to incorporate other critical function – from sales and customer advocacy to data science and innovation – means that underwriters in the future will be well positioned to contribute greater business value to their companies. In that sense, the future of underwriting looks bright.
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