The underwriters of the future will need to be “exponential,” multiplying their value by developing new skills and taking on enhanced responsibilities. This means evolving into new roles, such as technology trailblazer, data pioneer, deal-maker, portfolio optimizer and risk detective, according to Deloitte’s new report, “The rise of the exponential underwriter.”
Deloitte surveyed 19 chief underwriting officers or equivalent business leaders from life and P/C insurers and examined 25,000+ job listings to determine the new roles underwriters will likely need to assume to optimize the use of emerging technologies and data sources, as well as the skillsets and capabilities they will require to meet rising expectations.
Deloitte’s analysis revealed three trends:
- Underwriters are being challenged to move from hindsight to foresight. Rather than relying on historical data, underwriters need to move toward actively monitoring portfolios to understand the impacts of new risks in real time.
- Underwriters are being asked to bring more science to the art of underwriting to take advantage of the proliferation of available data.
- The nature of risk is changing (thanks to climate change, increased urbanization, automation, the gig economy, work-from-home, etc.).
To stay relevant and competitive, underwriters will need to take on new roles and responsibilities, such as:
Technology trailblazer—Exponential underwriters would likely be in charge of managing the digital workflow. They would supervise automation programs to optimize performance and improve operational efficiency. Collaborating closely with IT teams, they would work to refine underwriting platforms, automate rule sets and test the automation’s performance. These underwriters also would likely become more involved in the software development process itself, reducing time to market and cost.
Data pioneer—Exponential underwriters would closely collaborate with data scientists to design, develop and implement analytic and predictive models to improve underwriting and pricing accuracy. They would monitor model outputs and rule sets, identifying when to update rules to reflect realities of market conditions and stay ahead of the competition. They could also engage with regulators early in the development of models and their underlying data sources to create more transparency.
Deal-maker—Underwriters would partner with sales teams to explain the rationales behind their decisions to agents and brokers as well as applicants. They could be called upon to help negotiate alternative terms and conditions to close sales rather than present their determinations as “take it or leave it” deals. They could also help account managers identify attractive risk segments and develop go-to-market strategies with producers.
Portfolio optimizer—Underwriters would take the lead in developing a mechanism to identify market trends through real-time monitoring of the business environment. This market intelligence also could be utilized to help develop modular products or enhance current products to give companies a competitive advantage.
Risk detective—Underwriters would spend more time assessing exposure probabilities at a case level in exceptional and complex situations and for high-priority clients. They could also learn to identify signals that could predict a potential event that could be avoided or at least mitigated.