Reimagining Commercial Lines Underwriting Workflows

Data I Commercial lines underwriters today are exploring the application of real-time data along with proprietary and third-party data to augment risk assessment and pricing. But the data underlying the risk selection is still mostly unstructured. Instead of spending their time analyzing complex risks, underwriters are having to expend copious amounts of time in sifting through unclear and unstructured data, handling multiple workflows, and standardizing the data for inputting into pricing tools to derive meaningful insights. Moreover, the data needs to be error-free and accurate for pricing to be accurate and for quotes to be quick. It cannot be outdated, incorrect, or incomplete. Innovative insurtech initiatives are enabling real-time, proprietary, and third-party data to pave its way to commercial lines. Underwriting needs such data to be of high quality for it to deliver predictive power. The data should also be easily ingestible into the system to offer any real value. Third-party data, such as address records in property insurance, can now be populated accurately and in a standardized manner using a modern geo-location solution. Such solutions employ geo-coding of parcels and buildings (going way beyond street addresses) and have very high fill rates and accuracy. Driving losses down with data-driven underwriting will require insurers to seek buy-in from policyholders, and more data and time to account for the entire policy lifecycle.

Digital Strategic Support • I An underwriter's experience and judgment will always With underwriters playing broader roles and getting outweigh automation in pricing commercial risks, which involved in portfolio steering, capacity optimization, and come with their unique complexities. Adopting product design tasks, they have less time to build a automation supported by artificial intelligence and relationship with brokers and clients. To make their roles machine learning to automatically collect data from less challenging and ease pressures, they need to seek various sources, clean it, and offer actionable insights strategic support to deliver on their roles and multi-task will significantly enhance decision support for the team effectively. To achieve that, insurers could bring in an of underwriters working towards implementing a robust expert technology provider to quickly adopt an pricing strategy. automation solution while ensuring business continuity and cost-effectiveness. Further, carriers can engage An intelligent automation system helps automate specialized workers offering independent services and underwriting using a business rules engine, rating engine, outsource a portion of their tasks which is not extremely and business process management tools. It makes sensitive, thereby reducing expense Factors. They could insightful decisions that help improve business also Focus on recruiting tech talent From startups or sister performance. Carriers should keep in mind the following industries, such as banking, which have seen rapid when adopting intelligent automation: digitalization, ultimately streamlining the integration of next-generation technologies across the underwriting > Incorporate expert decision algorithms and integrate data value chain. from multiple sources. > Derive real-time decision support for technical pricing as well as portfolio management. > Automate a few repetitive tasks like reviewing an application to determine its acceptability. > Ensure its conformity to underwriting guidelines using machine learning techniques. ..,. ., XCEEDANCE Reduce the cost of processing Spend SO% - 70% less submissions by over 50% time on data entry To maintain a profitable book of business, while �------.... ✓ contributing to a growing market share, commercial Achieve 95%+ doto accuracy =·-·-- using automated data insurance underwriters need to strike a balance i::=-::::..1 - _•><_mc_t -----1@ between quality and speed to market. Efficient risk selection and accurate pricing will depend on distinctive insights gathered from the data available in the submissions, augmenting it with internal and external data, and determining new and robust factors to help predict losses.

CONCLUSION By following the three tenets described in the previous sections, commercial insurers can ensure the success of their underwriting transformation projects, getting them to yield a higher ROI as a result of lower turnaround times on quotes, better risk selection, and more accurate pricing. They can plan to turn targeted digital interventions into long-term solutions using a baseline and continuously monitoring, managing, and improving processes and performance going forward. With in-depth process studies, a prudent digital strategy, and bolstered change management and governance processes, insurers could make the three tenets an integral feature of their operations across functions. Those transformation initiatives will help insurers meet the expectations of a tech-savvy policyholder base that demands quick, flexible, and smart solutions always. It is safe to say that the expected improvements to policyholder experience through enhanced business- technology alignment will lead underwriting operations into the future of intelligent automation. About the Author RACHITA NAHATA Vice President, Underwriting Xceedance Rachita leads the underwriting services team at Xceedance. She has extensive experience in the insurance industry, working across functions, including analytics, underwriting, pricing, product development , quality control and marketing. She is a Chartered Property Casualty Underwriter (CPCU), an Associate in Reinsurance (ARe), and is certified in Risk Management by The Institutes. About Xceedance Xceedance is a global provider of strategic consulting and managed services, technology, and data sciences to insurance organizations. Domiciled in Bermuda, with offices in the United States, United Kingdom, Liechtenstein, Germany, Poland, India, and Australia, Xceedance helps insurers launch new products, drive operations, implement intelligent technology and blockchain solutions, deploy advanced analytic capabilities, and achieve business process optimization. The experienced insurance professionals at Xceedance enable re/insurers, brokers, and program administrators worldwide to enhance policyholder service, enter new markets, boost workflow productivity, and improve profitability. For more information, visit www.xceedance.com or write to us at [email protected]. www.xceedance.com Managed Services Consulting Technology © 2020 Xceedance