As 2015 ramps up, predictions for the coming year(s) are populating information channels, and many, will no doubt, highlight the advancing efforts to enhance, expand, and improve underwriting functionality, productivity and profitability. Rising above the host of technology trends and flavors of the day, one commonality remains for insurers: underwriting is a key driver of growth and profitability. Insurers will focus on leveraging technology to improve underwriting for some time to come.
Fortunately, with the current abundance of solution choices, insurers have wider access to comprehensive and integrated underwriting systems that can build and introduce products quicker, improve risk selection and bind business more quickly and efficiently. In recent years, new technologies have driven product innovation and growth in the form of micro-insurance and usage-based insurance products and new coverages such as cyber insurance. Modern underwriting systems need to be equal to and enable this type of innovation.
As more carriers transition to modern underwriting solutions that allow them to be more innovative, they have gained a clearer understanding of the importance of data in the context of underwriting. New data sources and sophisticated analytics can substantially improve decision making, minimize risks and provide additional value – and even better pricing - to customers. It can be said that the art & science of underwriting, is rapidly transitioning from reactive to proactive – and the trend will only deepen.
Deficiencies with incomplete and inaccurate data collection, exposure assessment analysis, coverage structuring, and pricing have decreased, largely due to modernization and advancements in insurance software. The emergence and impact of disruptive advances in big data, predictive analytics and cutting edge technologies like spatial information, are paving new paths in underwriting, increasing proficiency and improving the quality of decision-making, and effectively closing the inefficiency gaps.
The new generation of solutions will allow insurers to not only collect data, but utilize sophisticated analytics to discover valuable insights that would otherwise remain hidden. In support of this trend, integrated core systems that provide easy integration to external data sources, comprehensive and aggregated customer data, and extensive system reporting on underwriting effectiveness and operations will help insurers better understand and underwrite risk.
Today’s competitive and fast paced business environment requires insurers to deploy advanced technology - tomorrow’s business will demand it.