Underwriting Evolution Gains Momentum with Artificial Intelligence (AI)
Technology is drastically changing the commercial underwriting landscape. A process that used to take days or weeks with underwriters manually gathering information, can now be done in hours or even minutes — with AI-enhanced solutions able to automatically and accurately identify risk and exposure information from publicly available sources.
But this is just the beginning. Technology right now is just helping to speed up current processes. AI-powered data solutions can help insurers with business expansion. So, what is next in the evolution of AI-assisted underwriting? Senior leaders at NeuralMetrics share their thoughts on what comes next.
Sathish Kumar Manimuthu, Chief Technology Officer: “I think we are on a path where underwriting technology will go beyond being transactional and become engines for growth. Traditionally, underwriters review historical loss trends when conducting risk assessment to determine loss incidences, exposures, and risk characteristics for specific lines of business. But AI technology opens opportunities to move away from underwriting reliance on historical loss information, towards adoption of a more immediate, transparent data-driven decision process for risk evaluation and pricing. Insurers and their underwriters can leverage real-time information about exposures — with confidence in the sourcing and accuracy of the data — to proficiently accept certain classes of business, and determine viable premium price points.”
Simi George, Chief Data and Product Officer: “With the speed and reliability of AI-generated data, the property/casualty insurance industry is able to enhance straight-through processing (STP) — especially for some of the more common risks. This is ultimately the holy grail for underwriting and while some approaches offer elements of straight-through processing, typically the result is an augmented manual process boosted by technology. Such approaches don’t meet the STP standards of leveraging touchless data throughout the underwriting and policy issuance workflows.
“But AI-driven data access is helping to move the industry in the direction of real-time, touchless, and reliably-transparent risk assessment information. So, we are not far off from true straight-through processing for more commoditized insurance products that rely on standard data.”
Chris Schrenk, Chief Underwriting Officer: “I would like to see carrier systems talk to each other more efficiently. This would greatly accentuate the value of enterprise data assets and provide a much better experience for customers. Carriers have systems for the submission process, claims, risk control, premium audit, and many more functions. But often those systems are siloed and information isn’t shared effectively across the company’s operations. As a practical example, small business customers have to answer a set of underwriting questions to get accurate quotes and policy premiums. At the end of the policy term, premium audit often goes back to small business owners and asks them the same questions again, because they don’t have access to the information underwriters collected. And if risk control also has to review the policy, they will likely need to ask business owners some of the same questions again in a single policy term.
“If carriers’ systems are better integrated and can share more of the same data elements that AI technology can produce quickly and accurately, then many redundancies can be eliminated, saving both insurers and policyholders valuable time, effort, and cost.”