5 Strategies to Drive Underwriting Excellence

In their 2014 ACORD LOMA Forum presentation, “Actionable Analytics at the Point of Decision,” Strategy Meets Action analyst Mark Breading and FirstBest Vice President Steve Robins announced that analytics are gaining a strong a foothold in the P&C industry. According to as-yet-unpublished research, 83 percent of P&C personal lines insurers plan to increase spending on analytics, as do 85 percent of commercial P&C insurers.

Robins and Breading went on to discuss the importance and increasing availability of data for more-profitable underwriting. The pair also stressed that data has a context — a point on which they elaborated by offering a shoe factory, with an excellent safety record, for an underwriting exercise, while withholding the fact that it was adjacent to a bomb factory.

Click through the following pages to learn Robins and Breading’s five strategies to drive underwriting excellence.

1. Creating a data hub. 1. Creating a data hub.

Robins and Breading believe that in order for insurers to pull operational systems and data warehouses together, they make first make them available to a common system, e.g. a data hub.

2. Data insight at point of decision. 2. Data insight at point of decision.

In their presentation, Robins and Breading held that data could include CAT models, as well as loss and financial data. By making data available in a single underwriting workstation, they said that insurers can expect to make better decisions in less time.

3. Data-driven processes and automation. 3. Data-driven processes and automation.

Modeling tools, flood reports, financial reports, exposure concentration reports, motor vehicle reports and telematics all can help underwriters increase productivity and accuracy. Robins and Breading went on to say that while automation increases both productivity and accuracy, simply having the tools and the data is not same as using it. Data determines workflow and drives processes.
The pair added that underwriters should have some visibility into processes and results. For example, if a high-crime threshold is exceeded, management approval could be requested.

4. Shared data across the team. 4. Shared data across the team.

Robins and Breading also suggested that insurers should share data across the account team. For example, data should be equally accessible to underwriters working on different accounts and across departments — the claims department could equally benefit from similar technology and data and enjoy similar increases in productivity and effectiveness.

5. Expanding use of data. 5. Expanding use of data.

Finally, Breading and Robins recommended that insurers should seek to deliver information and insight to the point of decision and use big data to learn what they don’t know.

“This is about innovation, it’s about rethinking,” Breading told attendees. “We’ve been doing underwriting for years and years. And we don’t want to throw that away. We have a lot of expertise and knowledge about how to assess risks, but we have to step back and see that there is a lot of new data available and a lot of new models we can tap into to better understand risk. We can get much more granular, and there are a lot of ways to package that information to get it to the point of decision. And so, how do we do all that so we are doing underwriting better than our competitors. That’s what it comes down to.”

For more about Robins and Breading’s presentation at ACORD LOMA, check out Analytics: Actionable and Integrated.