Underwriting is the secret sauce of the insurance industry. The process of selecting and pricing risk is essential to the profitability of a carrier, and the deep expertise necessary for this skill set is among the most valuable assets an organization has. Insurers traditionally have competed largely based on the individual judgment of highly experienced underwriters. Insights captured in manuals of procedures and underwriting guidelines are carefully taught to succeeding generations.
Over the last few years, carriers have been heavily engaged in replacing core policy admin systems and increasing the automation of their underwriting processes. This is enabling a fundamental transformation of the underwriting process. Gone are the days of identical products across the industry and standard rating algorithms used by all carriers.