AIG’s Chief Executive Brian Duperreault highlighted the changing role of the underwriter as an integral part of re/insurance industries adaptation to the “modern era” of AI and technology, saying they need to become “part actuary, part data scientist,” in an interview with Asia Nikkei.
The skill set required by underwriters is shifting to include use of new data and analytical tools that could make underwriting more efficient and ultimately drive down cost of premiums, making re/insurers more competitive.
Duperreault said; “the underwriter is going to need different skill sets than they’ve had before. And those skill sets are all around being adept, facile, being agile with data, and analytics. And algorithmic processes. So they become part actuary, part data scientist, and also still that ultimate risk taker.”
He said InsurTech’s essence is simply in using data and analytical tools to make the job of re/insurers more professional and understanding of risks.
Speaking of AIG’s partnership with Two Sigma, an investment firm whose decisions are guided by AI, Duperreault told Asia Nikkei “they make their decisions with algorithms. We do the same thing: We gather a lot of data and make a decision. So why shouldn’t we be able to take that technology and capability and apply it to our business?”
The enhanced data analysis and decision making tools mean that in coming years cost of premiums “should come down” said Duperreault, explaining “we have businesses where I don’t even ask any questions. Because if you give me your name and address, I know all about you. I know enough to make a decision about the risk and at what price.
“And so this process of getting the information to the person who has to make the decision, that can change dramatically. If we can do that a lot simpler, then there are expense savings. And I believe we can. And we’re working on ways to do that.”
Ultimately, underwriters that are able to leverage technologies to enhance their assessment of risk and accurate pricing, will be the trailblazers of their firm’s success; “And so if you want to be the best partner to your client, then you take the risk that they really need to have removed, and you do that at a price that makes sense.
“The essence of greatness is: Are you the best at that? Are you the best risk taker there is, that you really understand this risk, that you have insight that no one has, including the insured themselves, about their own risk? If you have that, then you are a great company, in my business,” Duperreault told the Asia Nikkei.
