Underwriters look to AI as business and career coach

In the second of this three-part miniseries on how artificial intelligence (AI) is transforming the role of the insurance underwriter, Richard Hartley, CEO, of insurtech Cytora, explains the pivotal role AI can play in boosting the skill and value of human underwriters.

This article is published ahead of the Intelligent Insurer webinar ‘Underwriting Transformation: Leverage AI to Win Better Risks and Build Stronger Relationships’ on May 28, 2020.

Question: Why is AI’s influence on the transformation in insurance underwriting so important?

Richard Hartley (RH): It’s important because insurance companies are struggling with productivity and profitability.

AI can help to elevate the role of an underwriter to one where they’re really able to focus on the risks they want and the relationships they’re building rather than having to do lots of research before they can even decide which risks to work on. This is something I discussed in the first Q&A of this miniseries.

Q: How engaged are underwriters with AI at the moment?

RH: Underwriters want to use AI as a tool, but today they are still doing a lot of very attritional work, such as data gathering and data rekeying, as well as juggling different systems to give them a slightly different picture. Under those circumstances, it’s really difficult to get your head above the parapet and think, ‘what risks do I want, which brokers do I need to spend more time on, which new partnerships do I need to work on?’

With AI, we see the underwriter role elevating and becoming much more of an orchestrator and choreographer of their portfolio. There will be less work where they’re in among the weeds of individual risks, adding all the data and rekeying all the risks.

So AI is important economically for productivity and profitability reasons, but also in terms of the future of the role of the underwriter, it has to be much more of a choreographer role than it is today.

Q: Could AI signal the end of the job title underwriter?

RH: As AI gets more sophisticated, I think the role of underwriters will move closer to becoming portfolio managers. Underwriters will really be looking at how the book or the portfolio develops as a whole, thinking about risk in relation to the portfolio.

In the future, there will be one role that will be a lot more analytical and strategic. And another role that will be a lot more sales focused and more relationship focused. The latter is more like a relationship manager in banking, focusing much more on the relationship between insurance companies and their key brokers.

Therefore, I think the role will become more polarised than it is today. Instead of the underwriter feeling like they have to do everything, you’ll have some underwriters moving more toward being analytical portfolio managers. And there will be other underwriters moving more toward broker relationship management. For the latter, the focus will be on how to articulate the appetite and how to get the right submissions coming through.

Q: What other changes are you seeing?

RH: We’re seeing an increasing desire of underwriters to learn from each other and share best practice. This has definitely been heightened by people thinking about the new normal and, post-COVID-19, how insurance companies might choose to work. Recently we’ve seen Nationwide in the US decide they are going to continue with remote working for their employees for the foreseeable future, for example.

More generally, we expect to see underwriters clamouring to have more digitally enabled collaboration. For example, junior underwriters will want to learn from more seasoned ones, to understand best practice and collaborate, as remote working becomes more prevalent.

AI will help with that and tech will too. It will lead to underwriters accelerating how they can realise their potential. On the job learning driven by AI can highlight what you can do more of and how you can get better rates out of your conversions. I see some of those technologies really maturing in the next year to two years.

The role of AI is to elevate the human. I think of AI as almost like a coach, it’s riding sidecar next to you, giving you on the job recommendations and helping you get better at everything you’re doing.

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.