Build a digital transformation strategy for commercial lines

Richard Hartley, chief executive officer of Cytora, will argue that this needn’t be the case during a panel discussion titled “Build a digital transformation strategy for commercial lines”, taking place at Commercial Lines Europe at noon on October 12.

By adopting true digital transformation that digitises their core end-to-end risk workflows, insurers can build a far broader, more profitable book of business and achieve measurable results rapidly. Hartley spoke to Intelligent Insurer ahead of the event.

Why should carriers be contemplating digital transformation?

It’s a term that’s been around for a while and often when people encounter it, they ask, what is it transforming into? They want to know, what are we going to become?

Digital transformation in the context of commercial insurance means carriers can become scalable and are able to profitably grow without adding cost to their business. Ultimately, they can write more risk with the same resources than they used to, improve the cost economics of incremental growth and achieve superior control over risk selection.

The technology exists today to allow them to digitise how they process those new risks and find ones that provide the right level of profit. Risk submissions have been a very manual, friction-filled process and this helps insurers understand quickly whether they want to take on those risks or not.

The opportunity is massive. It allows insurers to grow and allows the insurance community as a whole to rise to meet increased level of risk in the world—particularly in the context of climate change. It can allow front-runners to outperform the market and achieve much superior combined ratios when scaling their business.

We’re seeing our customers achieving up to 50 percent growth while their team resources remain the same.

What processes are most ripe for streamlining?

Everything that comes into the insurer, all the workflows that come from risk intake, such as new business from brokers, renewals and mid-term adjustments, are areas that can be digitised and streamlined. It moves the insurer to a point where it can process risks to any level of volume without expanding its resources.

Underwriters can then move towards a portfolio management approach, optimising how risks move through different flows to different destinations based on their appetite fit, portfolio alignment and complexity.

It’s about distinguishing between a risk that you can straight-through process to a complex one that you need an underwriter to focus their skills on and control how much exposure you take on as a company. And even with those more complex risks, digitisation can still help you to present them in a decision-ready way.

At decision-making destinations, risks can be situated in portfolio context, enabling underwriters to understand the risk relative to similar risks in the same segment and achieve the highest quality underwriting decision.

What is the overall benefit to the insurer of digitisation?

Creating capacity and freeing up lots of time for underwriters who can then deploy that capacity to create growth. You can use it to have more frequent and more effective conversations with brokers to help you win a risk in a highly competitive market.

It’s also about having more strategic conversations. What can we do to be more competitive and change our appetite? Those conversations become about business development, making them more market-focused.

What are the biggest challenges insurers face in the digital transformation process?

Around 80 to 90 percent of what a carrier receives from brokers will be emails in PDF or CSV (database) format. These will be inscrutable or unreadable to a software platform. We can solve that problem for them. By collecting those emails and turning them into a digital format, insurers can create digital risks flows that send risks to the correct destinations and automatically update all their existing systems, whether that’s Salesforce or Microsoft Dynamics, for example, which are populated with correct risk information data.

They don’t have to change their underwriting process at all and they don’t have to go on a lengthy transformation process. Cytora can accelerate the existing workflow and systems without requiring underwriters to adopt a new interface.

What should attendees take away as an actionable insight from this panel?

That measurable improvements are near-term and achievable. They should identify a team where there is a clear growth or underwriting profit objective, identify the workflows where risks come in and where they go, and then see how technology can help them achieve that objective.

We’ve been working with a wide range of insurers and what they need to do is simple: identify where the risks come in: usually email inboxes and other API intake points, encode their risk appetite and portfolio strategy which can be continuously refined over time, and start to process their risk intake digitally so that underwriters receive decision-ready risks and are able to deploy their capacity to drive profitable growth.

Richard Hartley, chief executive officer of Cytora, will be speaking during a panel discussion titled “Build a digital transformation strategy for commercial lines” taking place at Commercial Lines Europe at noon on October 12.

To register for the event (free for insurers and brokers), click here:  https://www.commercial-lines-innovation-europe.com/home