An exciting new frontier of improved customer service andprofitability is emerging in the Property and Casualty insuranceindustry — that of underwriting.

Where historically an underwriter's job has been viewed as oneof accepting or rejecting risks and also one of creating ahomogenous portfolio of risks, we are witnessing the emergence of anew breed of underwriters because the advent of new technology.This new class of underwriters is leading the change inrevolutionizing the insurance business and better equipped tohandle risk management.  

Technology holds the key to the shifting sands of marketdynamics in the industry. We are surrounded by a combination ofmarket forces that are moving customer expectations. There is agreater number of millennials joining the workforce, customers' preferences and expectations are being reshaped andsharpened by providers such as Facebook, Amazon, Alibaba andSeamless. Even our transportation is becoming on-demand withproviders such as Uber and Lyft. Money is being increasinglydigitalized. In such a stimulating and progressive environmentgoing through a great amount of flux, the nature of risk assessmentand selection must address not only internal requirements, butthose of the insured and the agent.

Status quo in underwriting

In conventional underwriting, agents send in their applicationsto an underwriting contact within the carrier's organization.

The underwriter receives the applications in a paper-based andmostly manual environment. The underwriting process is cumbersome,with the underwriter spending a considerable amount of time inresearching the risk and populating data subsequently in aninternal system. This stage commonly involves a lot of navigationback and forth through non-regularized systems such as e-mails andlegacy systems, such as policy administration.

The underwriter is left with little bandwidth in closelyexamining, quoting and optimally pricing the risk.

As an industry, there is an overwhelming need for technology tocreate fluid connections among the various stakeholders in theinsurance process.

The technology must include robust analytical capabilities thatfree the underwriter to address customer and agent needs as well asensure appropriate risk pricing and positioning. A cohesivetechnology that spans across agent portal, policy and claimssystems, document management and e-mail, to predictive models,analytics, business intelligence tools, and a variety of dataservices.

The application must also take into account the interconnectednature of the process and should bring in workflow capabilities tomove tasks from agents to underwriters seamlessly. Empowered bytechnology, the underwriting staff can expand their view of risk byworking with agents in real time to better manage their risk.Agents also have a window into the missing information about risksand exposures, and can remove obstacles the application processencounters. On the whole, we need to increase the ease of doingbusiness between the carriers and the agents to better serve theinsured.

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Technology as a differentiator

As an industry, we have focused the underwriter's role aroundreceiving data that comes from the producer, checking to make surethe data is accurate and determining based upon the data, whetherthe risk is acceptable or not.

In addition, underwriters must assess whether the risk is even arisk that they would like to write. Technology has progressed tothe extent that a volume of the risks that the carrier organizationis screening can be underwritten through rules-driven profiling andstraight-through processing. Carriers can take on the risks suitedto their appetite by setting pre-qualification and eligibilityrules. This helps build a better book of business and positivelyimpacts profitability.

The present underwriting ecosystem is burdened with apolicy-centric view of customers, leading to not meeting customerexpectations of a seamless interaction with companies. The processmust become customer-centric. Modern technology perfectivelypositioned should provide a single view of the insured's accountacross the enterprise, lines of business, policy systems anddevices. Applying these capabilities enables the underwriter tofocus on increased agent efficiency and meeting customerexpectations while better analyzing and pricing every risk.

Why is this necessary?

These new applications are rich in the sources of data availableto the underwriter, which will increase the underwriter'seffectiveness and help them better manage their risk by reducingthe amount of time spent searching through various datasources.

Standardizing the data used by the underwriters, embeddingconsistent rules throughout the organization and allowingunderwriting knowledge to be codified and maintained will provide asingle source of truth for the organization. As importantly,underwriters will  be able to identify cross sell andupsell opportunities across lines of business. In general, theseapplications will allow the underwriter to be more surgical intheir approach to the business and generate loss ratios that willoutperform the industry.

Underwriting is one of the few bastions left to fully leverageand use technology to the fullest. Given the current competitivelandscape, it is essential that available technology be applied tothe greatest extent to accurately price risks, create strongerrelationships with agents and better serve customers.

Tony Cid is global head of commercial insurance at JerseyCity, N.J.-based insurance software company IntellectSEEC.