Greg Murphy, EVP for INSTANDA North America, agrees that innovation is key when evaluating underwriting processes and that it doesn’t take a multi-million-dollar project to transform your underwriting methods. After participating as a panelist for SVIA’s Innovation Trailblazers Webinar: Innovations in Continuous Underwriting, he has some more thoughts on how to transform and experience underwriting YOUR way!
If you think about large risks and how they are underwritten today, underwriters do a fair amount of web searching to try and correlate risk information manually. We see this every day as we talk to prospects and review their underwriting processes. The risk that gets on the books often has limited “real risk” data because insurance carriers are so focused on filling out forms to get tactical data. Underwriters do not have enough time to thoroughly examine the risks. Or...if they take the time they need, the opportunity has already passed them by.
The question is – how do we simplify the risk analysis and data gathering process and give our underwriters the information and time they need to properly assess risk?
There are multiple ways to do this and the short answer is - use some new thinking and some new technology. One example I have seen work well – there are AI engines out there (e.g. IBM Watson) that can apply intelligence to underwriting questions and discover things that underwriters may have never unearthed. Over time, underwriters begin to think differently about assessing risk and how it can be automated using concepts such as AI. Once observations can be replicated, they can be used to further automate the underwriting processes through platforms like INSTANDA. We are watching clients do this every day.
Many carriers think core systems must be completely replaced to be innovative and digitally transformative. This is simply not true. An examination of your core processes and a good understanding of the ‘WHY’ behind each step can present some very compelling ideas for transformation. Once you do that, you will easily find 2-3 ways to increase underwriter’s effectiveness. This can change the bottom line immediately and set the course for additional transformation over time.
The first thing we do at INSTANDA is to get to know the personality of the carrier and how much they are willing to change. It’s not enough to think innovating is a great idea, you must be willing to change! Then you can start to look at HOW you are underwriting today. And don’t just ask the underwriters, talk to those that are around the process – you will be amazed at how many good ideas come from people around the process, not necessarily just from the underwriters.
After you identify the process of underwriting, using exercises like the “5 why’s” can help a team understand “why do we do that?” This exercise will unpack the process; and the team will come up with some great ideas on how to improve processes that do not involve multi-million dollar projects.
Once you understand the why behind your processes, you can decide out how to implement technology. But don’t just dive in and get focused on the implementation of technology.....not yet!
First you need to prove it on paper. I don’t mean take months to write out a process, perfect it and then implement the technology. That takes too much time! What I mean is once you understand the ‘why you do what you do,’ then you can start to whiteboard how you envision solving the problem.
Write it on the whiteboard, identify how you can measure it and then test it out. Try it manually for a month and assess results. If it works, then continue to expand on it. If it fails, then go back to the drawing board. If we have a client teed up to do a multi-million-dollar project, we can save that client time and money if they model it out manually for a month before they begin their project.
It’s time to stop thinking we need to take years to develop new products and processes. Learn from the many companies that have gone before you....don’t try to change everything all at once. Go on a journey of discovery with your underwriting staff and you also get the benefit of deep ‘buy in’ from those that are doing the work. A price cannot be placed on this result. It’s time that we start innovating our underwriting processes and learning from each how to experience underwriting our way, rather than the way of the past.
To contact Greg Murphy, simply email Greg.Murphy@instanda.com
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