Technology Seen as Critical to Strengthening Insurance Underwriting

The FINANCIAL — Technology investment is seen as the best way to improve the quality of underwriting in commercial insurance, but lack of data integration and technology training are limiting underwriting productivity and efficiencies, according to findings of an Accenture survey of 559 commercial insurance underwriters in the United States.

The survey indicates that an overwhelming majority of underwriters (93 percent) perceive investment in technology as the best way to improve underwriting quality, and two-thirds of respondents said technology has significantly improved underwriting performance.
 
However, more than half of respondents (54 percent) said technology also has increased their workload – mainly due to lack of data integration across their company (cited by 81 percent of that group). Lack of process integration (67 percent) and insufficient training (57 percent) were the other major reasons for increased workload cited by respondents, according to the report.

“There is no question that technology has brought a step change in the quality of insurance underwriting in recent years,” said John Mulhall, a managing director in Accenture Property and Casualty Insurance Services and the management consulting lead for insurance policy services offering in North America. “But the full benefits of technology investments in terms of productivity and efficiency cannot be achieved without broader data and process integration across the organization," he added.

When asked what measures they will invest in over the next three years to improve underwriting effectiveness, respondents cited process automation (57 percent), predictive analytics for risk evaluation and pricing (51 percent) and external data to evaluate risk (51 percent).
 
“Underwriters typically face a number of challenges in evaluating risk,” said Michael Reilly, a managing director in Accenture Property and Casualty Insurance Services. “These include difficulties in obtaining historical, market and claim information while pricing the risk, disconnected account information, and long and unnecessarily complex communication channels. Underwriters must often re-enter data to and from multiple systems and must rely on an employee base that is subject to turnover – and also with many of the most experienced underwriters nearing retirement. Automated underwriting systems offer the promise of better information and greater efficiency through the reduction of re-working and errors,” he added.