Why underwriters don’t underwrite a lot | Insurance coverage Weblog
What makes an insurance coverage service an insurance coverage service and never a generic monetary providers group? That is greater than a philosophical thought experiment.
I feel the most effective reply to that is underwriting. A service may, in idea, outsource each a part of their enterprise and so long as it was nonetheless analyzing and pricing threat, you would nonetheless precisely describe it as an insurance coverage service. Underwriting is the guts of the insurance coverage enterprise.
That is what makes a longitudinal research 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, carried out final 12 months, 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 typical underwriter in our research 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 workforce that “underwriters have been became advertising and marketing executives as an alternative of underwriting executives.”
One other spoke of “the misperception that expertise has made it simpler for extra workloads. It helps with higher resolution making, but it surely provides time for every submission to open and use all the brand new instruments.”
2: Inefficient programs, 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 Others challenges with small however nonetheless vital pickup have been outdated or rigid programs, lack of know-how on the level of want, poor group of underwriting info, and inadequate deal with coaching.
3: Underwriting high quality is declining… in response to underwriters.
We discovered that the proportion 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 related traces, with 63% of underwriters ranking their very own as “superior” in 2013 and simply 46% doing the identical final 12 months.
4: Know-how could also be doing extra hurt than good.
The usage of expertise, broadly talking, has been ineffective at decreasing 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 expertise on their work. A majority of respondents to our survey stated it has boosted their pace to cite, improved their potential 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 potential 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.
Taken by itself phrases, every of those 5 findings accommodates a regarding fact in regards to the defining perform 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 carried out about it?
On this weblog collection, we’ll discover these important questions.
Get the newest insurance coverage business insights, information, and analysis delivered straight to your inbox.