A vast majority of underwriters are worried about insurers’ ability to deliver next-generation underwriting, mainly due to underperforming technology, hyperexponential research has revealed.
Analysts stated: “This disillusionment comes as the majority of insurance firms are about to embark on a new investment cycle for pricing tech over the next 12 months. The research paints a bleak picture for insurance underwriting, revealing 59% of respondents require more data in the pricing process, and 55% need improved access to real-time portfolio insights.
“This is particularly prevalent for Specialty and Commercial insurers, who transformed from the pre-digital age (Underwriting 1.0) to leveraging standalone software (Underwriting 2.0), and are now struggling to integrate systems and data to unlock the insights and automation possible in the age of Underwriting 3.0.”
The research, conducted by Coleman Parkes surveyed 245 underwriters working in Specialty and Commercial insurance across the UK and US on behalf of hyperexponential.
It revealed that 59% of underwriters believe that previous pricing platform investments haven’t delivered the promised improvements to the underwriting process.
Additionally, transformation scepticism is evident, with 79% of underwriters expressing concern that processes won’t improve in the near future – over a third (36%) worried about that being true even in 2-5 years time.
Today’s underwriters are still stuck with time-consuming manual tasks and limited access to the data and insights they need to make the best risk decisions.
Inaccurate, cumbersome pricing models exemplify these challenges. The research revealed that only 1 in 5 underwriters use them consistently and 84% worry about a future where they still won’t be fit for purpose.
Tom Chamberlain, VP Customer & Consulting at hyperexponential, explained: “Instead of automated processes, accurate pricing and proactive portfolio management, many of today’s underwriters are disillusioned with time-consuming manual tasks, inadequate pricing processes, and inconsistent data insights.
“To transition to Underwriting 3.0, Specialty and Commercial insurers need to harness decision intelligence solutions to produce better insights and better outcomes.”
Achieving Underwriting 3.0 is possible, analysts highlight. Through Generative AI and LLMs (Large Language Models), the integrated technology ecosystem of Underwriting 3.0, underwriters will be able to achieve greater accuracy and more freedom through streamlined workflows and data-driven profitability, the report notes.
Jamie Wilson, Head of Pricing and Innovation at hyperexponential, said: “Without having to lift a finger, underwriters can now bring their instincts and expertise to bear on the enhanced risk information and decide whether to quote or decline the risk.
“If the decision is to quote, all it takes is a click and the submission is priced. The appetite for Underwriting 3.0 is there. It’s up to insurers to make it a reality.”
