The function of the underwriter in the insurance sector is being rewritten as a result of emerging technologies. The emergence of new data sources is influencing the decision-making process of insurance executives and underwriters. Insurance companies are looking to technology to help them deal with the processing demands of vast amounts of data. In addition, technologies like predictive analytics, big data, and artificial intelligence (AI) are commonly used in insurance underwriting. The following are the trends that will shape the future of insurance underwriting.
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Growth of Data and Analytics
Insurance companies are using digital gadgets such as wearables to capture real-time customer data. To increase their underwriting capability, they’re also exploring non-traditional sources of client data. For example, mapping technology such as drones provides a new source of data for calculating property insurance risk. Likewise, customer reviews and employee satisfaction scores are utilized to underwrite commercial coverage. As a result of their use of multiple data sources, insurance companies tailor their underwriting processes to each individual customer.
Leveraging AI and Machine Learning (ML)
AI advancements have impacted insurers, who are looking to use the technology to improve their underwriting capabilities. According to an estimate, by 2024, the value of AI in underwriting will exceed $20 billion in premiums. Insurers recognize the importance of machine learning and are implementing it to deliver more consistent results and free up insurance underwriters to focus on other important activities.
Evolution of the Underwriter
Underwriting processes are being reformed across the insurance industry, and the role of the underwriter is changing. With the rising automation of procedures and expanding the amount of data, underwriters’ skill sets are changing. Insurance businesses are putting just as much emphasis on finding the right people as they use new technology. Underwriters are expected to be more dynamic in the future, with a skill set that includes behavioral economics, data science, traditional underwriting skills, and the capacity to think outside the box.
