3 Trends Emerging in Insurance Underwriting

By Insurance CIO Outlook | Thursday, January 09, 2020

The combined impact of data and technology is contributing to bettering underwriting in the insurance industry. 

FREMONT, CA: Emerging technologies are rewriting the role of the underwriter in the insurance industry. The generation of new sources of data is also impacting the insurance leaders and underwriters with the decision-making process. Insurance firms are eyeing technology to address the processing requirements pertaining to the massive amount of data. Further, technologies such as predictive analytics, big data, and artificial intelligence (AI) are widely implemented in insurance underwriting processes. The trends shaping the future of insurance underwriting are presented below.

Evolution of the Underwriter

Underwriting processes are getting restructured across the insurance lines, accompanied by the evolving role of the underwriter. The skill sets of the underwriters are transforming with the growth in the amount of data and the increasing automation of the processes. Insurance companies are investing as much on the right talent as they are focusing on the deployment of new technology. Currently, underwriters are expected to be more dynamic, with a skill set encompassing behavioral economics, data science as well as conventional underwriting skills with the ability to think outside the box.

Growth of Data and Analytics

Insurance firms are collecting real-time customer data from digital devices such as wearables. They are also looking for non-traditional sources of customer data to improve their underwriting capability. For instance, mapping technology such as drones is offering a new source of data to measure insurance risk in the property space. Similarly, employee satisfaction ratings and customer reviews are being used to underwrite commercial coverage. Thus, using various sources of data, insurance firms are making their underwriting process more specific to an individual customer. Top Underwriting Solution Companies

Leveraging AI and Machine Learning (ML)

Advancements in AI technology have influenced the insurers as they are eyeing the technology to enhance their underwriting capability. According to a report, the value of AI in underwriting will reach $20 billion in premiums by 2024. Insurers understand the value of ML and are incorporating the technology to produce more consistent results and free up insurance underwriters for more essential tasks. 

The above trends are drastically influencing the underwriting processes in insurance. A mix of data and technology seems to be the way underwriters will take in the future.

See also: Top Insurance Technology Solution Companies

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