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HomeInsuranceWhy underwriters don’t underwrite a lot | Insurance coverage Weblog

Why underwriters don’t underwrite a lot | Insurance coverage Weblog



What makes an insurance coverage provider an insurance coverage provider and never a generic monetary companies group? That is greater than a philosophical thought experiment.

I believe one of the best reply to that is underwriting. A provider may, in idea, outsource each a part of their enterprise and so long as it was nonetheless analyzing and pricing danger, you might nonetheless precisely describe it as an insurance coverage provider. Underwriting is the center of the insurance coverage enterprise.

That is what makes a longitudinal examine of underwriters so necessary.

Since 2008, Accenture has partnered with The Institutes to survey underwriters about underwriting. To my information, that is the longest-running longitudinal underwriting survey within the business.

And the outcomes of our most latest P&C Underwriting Survey, performed final yr, are nothing lower than alarming.

Listed here are 5 key takeaways from the information.

1: Underwriters don’t spend a lot time underwriting.

We discovered that the common underwriter as we speak spends 70% of their time at work on non-underwriting actions. The common underwriter in our examine spends 40% of their time on administrative duties, 30% on negotiation and gross sales help, and 30% on precise underwriting.

One underwriter instructed our analysis staff that “underwriters have been become advertising executives as an alternative of underwriting executives.”

One other spoke of “the misunderstanding that know-how has made it simpler for extra workloads. It helps with higher determination making, but it surely provides time for every submission to open and use all the brand new instruments.”

2: Inefficient methods, redundant inputs and handbook processes are the most important hurdles.

These have been probably the most generally described hurdles to underwriting enterprise success by a large margin. Others challenges with small however nonetheless vital pickup have been outdated or rigid methods, lack of expertise on the level of want, poor group of underwriting info, and inadequate concentrate on coaching.

3: Underwriting high quality is declining… in accordance with underwriters.

We discovered that the share of underwriters who describe their underwriting processes and instruments as “superior” has declined significantly since our final survey in 2013. We measure this throughout 5 dimensions within the survey, and all 5 have declined. For instance, 52% of underwriters instructed us in 2013 that their technical coaching packages have been superior. In 2021, that shrank to 34%. Frontline underwriting practices declined alongside comparable traces, with 63% of underwriters score their very own as “superior” in 2013 and simply 46% doing the identical final yr.

4: Expertise could also be doing extra hurt than good.

The usage of know-how, broadly talking, has been ineffective at lowering the workload of underwriters, with 64% telling us it has elevated their workload or made no distinction.

There’s an necessary nuance to unpack right here. Most underwriters have seen some optimistic impression from know-how on their work. A majority of respondents to our survey mentioned it has boosted their velocity to cite, improved their skill to deal with bigger quantities of enterprise, and boosted their entry to information.

However simply 46% say it has had a optimistic impression on automating or eliminating non-core duties, and solely 35% say it has boosted their skill to cross-sell accounts.

5: The expertise administration image is bleak.

Maybe probably the most alarming findings of this latest survey come from evaluating how underwriters felt about expertise administration at their carriers in 2013 and 2021. In a nutshell, carriers have hemorrhaged optimistic sentiment.

Click on/faucet to view a bigger picture.

Taken by itself phrases, every of those 5 findings comprises a regarding reality in regards to the defining operate of insurance coverage organizations as we speak. Taken collectively, the outcomes are nothing in need of alarming.

So what’s behind them? And—extra importantly—what’s to be accomplished about it?

On this weblog collection, we’ll discover these important questions.


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Disclaimer: This content material is supplied for normal info functions and isn’t supposed for use instead of session with our skilled advisors.

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