Intelligent automation enhances underwriter ability to ‘out compete’ rivals

Artificial intelligence (AI) is everywhere from mobile phones, to in-home assistants, and its influence on the evolution of the underwriter is no exception. Richard Hartley, CEO of insurtech Cytora, shares his insight on how it will transform underwriting to the benefit of all in the first of this three-part miniseries.  This article is published in advance of the Intelligent Insurer webinar ‘Underwriting Transformation: Leverage AI to Win Better Risks and Build Stronger Relationships’ on May 28, 2020.

Question: What are the big issues you’re looking forward to discussing with the webinar panel?

Richard Hartley (RH): For me, there are two main areas. 
One is how underwriters can really win the risks that match their appetite using AI. It can give them more information about the risk, allowing them to understand the risk and exposure in more detail and with more accuracy.

The other is that AI can help underwriters win the risk by automating parts of the process, for example, by enabling them to respond to the broker faster. Then underwriters can take the action they need to out compete any competitors and win the opportunity.

AI provides a more accurate view of the risk to help underwriters decide whether to prioritise it. Once that decision is made, they can take the right actions to be the most compelling with the brokers who end up winning it and binding it.

Q: What examples are there where AI is already doing this? 

RH: As an underwriter, one of the difficulties is that you are inundated with risk submissions and have too many submissions to actually work on, which is also known as the prioritisation paradox. The question is ‘which one do I choose and work on first?’ 

However, there lies the paradox. There’s little chance as an underwriter to really figure out which one you want to work on because you have to put the work in to gather initial information on other points of risk before you can decide whether you want it or not.

What we’re doing with AI right now is helping underwriters to triage their risk submissions and rank them according to attractiveness. This helps the underwriter save time and put all of their focus onto the risks that really match their appetite. They can see what is possible and what has the highest chance of winning.

Q: What is the benefit for insurance companies?

RH: They can reduce their expenses by avoiding working on the risks that they don’t want. Insurance companies can shift their portfolio so it can be managed more effectively by achieving a congruence between their true underwriting appetite and where their underwriting team spends all of their time. 

One of Cytora’s customers in the mid-market space was able to increase their underwriter capacity by more than 30 percent. Each risk submission requires less time, so they have more time in the day to write more attractive business.

For us that is the key. You can reduce the time it takes an underwriter to service a risk submission and then they can better use their time by pointing them at the most attractive  risks as they come in.

Q: What response have you had from customers?

RH: Our customers want to achieve a real improvement to their commission to bind ratio. With AI, they’re binding more of the risks they want and the time it takes them to do that is really reducing. They don’t have to spend as much time gathering information because we automate a lot of that by adding external data. One example is with the key P&C risk rating factors, our AI platform has done some of that work before the underwriter even has to look at them.

Join Intelligent Insurer as they talk to Cytora, Munich Re, Brit and SCOR about the practical steps insurers can take to drive efficiency and accuracy by augmenting the underwriter’s toolkit with a digital upgrade. 

Sign up for the live webinar ‘Underwriting Transformation: Leverage AI to Win Better Risks and Build Stronger Relationships’ (May 28 @ 3 PM BST/10 AM ET) by  clicking here.

Paolo Cuomo, director of operations, Brit Insurance, will be joined by Andrew Rear, chief executive officer, Digital Partners, a Munich Re Company, Will Thorne, head of EMEA, specialty and Lloyd's Ventures, SCOR, and Richard Hartley, CEO, Cytora.