Over the past two years, the challenges prompted by the COVID-19 pandemic have forced businesses to scramble as new issues arise almost every day. The one challenge that has remained stagnant is the staffing crunch, prompted by the recent Great Resignation and hiring gaps. The U.S. Bureau of Labor Statistics found that employee turnover rates across every industry rose from an already staggering 54.5 percent in 2016 to 69.7 percent in 2020. This shortage is attributed to America’s workers re-evaluating their jobs while working remotely or on leave during the pandemic’s onset. Others took the time away from the office to change careers or take a break from employment entirely. Whatever the reason, the reality is that many industries are feeling the pinch across the spectrum of the labor pool.
While the attention has focused primarily on industries like retail, food and beverage, manufacturing, and hospitality, the commercial insurance sector was not immune to the disruption to business operations. Pandemic-fueled challenges prompting endemic, nationwide staffing issues have caused delays in performing proper risk assessments needed for projects.
Although commercial insurance has been one of the industries most impacted by the staffing crunch, it is also one of the least talked about. Commercial insurance brokers and carriers process approximately 100 million submissions each year, which entails scouring hundreds of pages and thousands of lines of data manually. To successfully do this, they need a full staff to take on a costly and time-consuming process that typically takes 45, 60, sometimes even 90 days to finish. Now, let’s consider that this same process is being performed with minimal staffing capabilities as more administrative work positions are left open. The labor shortage is pushing more executive-level staff to perform these tasks rather than utilizing their time more wisely on evaluating risk. The staffing crunch is also creating severe delays in the underwriting process and slowing final approvals for projects. To streamline this antiquated process, many commercial insurance professionals are turning to technology.
Even before the pandemic, commercial insurers have suffered from data overload and hesitated to digitally transform operations. Insurance is inherently an industry dependent upon data, which presents itself in thousands of ways. Traditional processes that involve executing a list of pre-programmed instructions have not been able to keep up with the broad scope of material to assess risk.
This outdated technique and desire to adhere to the status quo cost commercial insurers billions of dollars each year. A global outlook survey by Deloitte’s Center for Financial Services found that 48 percent of insurance executives agreed that the pandemic showed how unprepared they were to “weather this economic storm.” Alternatively, only 25 percent firmly believed their carrier had “a clear vision and action plan to maintain operational and financial resilience” during the global pandemic.
Now that the labor shortage affects commercial insurers’ ability to evaluate risk, the solution lies in emerging technologies. Insurers can utilize advanced digital tools like artificial intelligence (AI) and machine learning (ML) to transform underwriting in commercial insurance, address the talent shortage and ensure the project pipeline isn’t bottlenecked. These innovations eliminate the need for team members to manually process millions of risk submissions and put brokers and carriers back in the driver’s seat to monitor data, increase profit margins and reduce approval delays of projects.
The core ways scalable AI and ML solutions contribute to the success of the commercial insurance industry include:
- Transform commercial insurance by automating and streamlining time-consuming, manual processes.
- Increase efficiency and generate more significant revenue.
- Accelerate the underwriting process to free up time for more value-added tasks managing and evaluating risk.
- Allow insurers to efficiently identify data patterns, improve predictions, and commence more efficient and rapid data-driven decisions.
- Quickly convert emails, PDFs, applications, loss runs and exposure schedules into enriched, structured data for underwriting tasks, pre-fill and analytics.
- Reduce the impact of the talent crunch, fast-track revenue, drive better risk selection, improve time-to-quote, and provide more complete and usable data.
Furthermore, AI delivers production-ready data from insurance applications, loss runs, emails, policy forms, exposure schedules and other critical documents at scale. This capability creates scalable and repeatable processes that review data and unlock valuable insights within the information that would usually be trapped in unstructured and semi-structured submissions to create actionable, ready-to-use data. Additionally, data libraries can be used to fill in gaps to advance risk management and shorten the quote-time process and to provide brokers and carriers with complete and enhanced datasets needed to increase productivity and enhance profit margins.
The time for commercial insurers to make a cohesive digital transformation is now. The current labor shortage is a long-term not temporary problem, but innovative technological solutions have the power to ensure commercial insurers are armed with the tools needed to fit their present and future needs. By adopting robust technical solutions that learn and adapt to the data as it is processed, commercial insurers can cement their stature as viable competitors in the industry and create the resilience needed to position themselves for future growth.