Poor data-integration limits productivity and efficiencies: Survey

NEW YORK, USA: Technology investment is seen as the best way to improve the quality of underwriting in commercial insurance, but lack of data integration and technology training are limiting underwriting productivity and efficiencies, according to findings of an Accenture survey of 559 commercial insurance underwriters in the United States.

The survey indicates that an overwhelming majority of underwriters (93 per cent) perceive investment in technology as the best way to improve underwriting quality, and two-thirds of respondents said technology has significantly improved underwriting performance.

However, more than half of respondents (54 per cent) said technology also has increased their workload - mainly due to lack of data integration across their company (cited by 81 per cent of that group). Lack of process integration (67 per cent) and insufficient training (57 per cent) were the other major reasons for increased workload cited by respondents.

"There is no question that technology has brought a step change in the quality of insurance underwriting in recent years," said John Mulhall, a managing director in Accenture Property and Casualty Insurance Services and the management consulting lead for insurance policy services offering in North America.

"But the full benefits of technology investments in terms of productivity and efficiency cannot be achieved without broader data and process integration across the organization," said Mulhall.

"The right questions should be asked and answered before selecting and implementing any new technology, such as ‘What should these technologies be able to do? How do they enable underwriters to focus on value-added activities and complex cases? What training is needed to maximize user adoption?'"

When asked what measures they will invest in over the next three years to improve underwriting effectiveness, respondents cited process automation (57 per cent), predictive analytics for risk evaluation and pricing (51 per cent) and external data to evaluate risk (51 per cent).

Among other key findings of the survey:

* More stringent regulations are seen by underwriters as having the most significant impact on their function in the next three years, cited by nearly three out of four respondents (73 per cent).

* Maintaining underwriting and pricing discipline is the top challenge for underwriters to achieve their business objectives, mentioned by nearly three out of four respondents (72 per cent).

* More than half (58 per cent) of respondents say speed to market is the most important goal driving investments in underwriting capabilities. However, more than seven out of 10 respondents (72 per cent) indicate that it takes their organization six months or more to launch a major new product.

* More than three-quarters (77 per cent) of underwriters say their organizations have already implemented, or are implementing, or are planning to implement mobile technologies for customers and for agents.

"The market is showing signs of slowing down and is likely to soften over the next couple of years, based on historical patterns," says John Mulhall.

"Softening rates and rising expense ratios will expose inefficiencies hidden in a more favorable market. Carriers have an opportunity to make investments to address underwriting discipline now, before a soft market cycle fully emerges. Carriers that invest effectively in data, tools and technology to improve underwriting accuracy and efficiency rather than just adding another tool to the process, while managing their strategy through market cycles will separate themselves from those unable to keep up," added Mulhall.