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Insurance Insights: Intelligent Underwriting Workbench

 
 

Insurance Insights | Gareth Miller |
30 March 2021

From our conversations with Insurance leaders, several topics have emerged as key focus areas for 2021 and beyond. In this series, some of our experts will provide insights on how to adapt, accelerate, and innovate in Insurance by tackling the areas of Open Insurance, Data Exploitation, Cloud Migration, Customer Retention & Cross-Selling, Intelligent Underwriting Workbench, and Low Code. In part 5, Gareth Miller explains the benefits of using an underwriting workbench and how to implement it successfully.

When asked to describe what underwriting looks like, those of us who work in the City of London will describe people hurrying around Lloyd’s of London carrying large bound folders of Commercial and Speciality paperwork. However, to borrow from Bob Dylan, the times they are a-changing and digitalisation is the new imperative.

It is easy to point to COVID-19 as the trigger which revealed paper-based underwriting to be untenable in a globally connected world. This would be unfair on those who had already instigated programmes aimed at removing paper from the process before the pandemic hit. The Underwriting Workbench is an increasingly sophisticated manifestation of this change, for which all Chief Underwriters should be lobbying.

WHAT IS AN UNDERWRITING WORKBENCH?

An Underwriting Workbench is a digital control panel and collaboration tool that offers a one-stop shop which streamlines processes, distributes work, accesses digitalised documents or emails, and brings in data streams and analysis. The best of them interact with underlying systems to present an integrated “single pane of glass”, which gives the user an integrated experience across multiple devices. As well as allowing underwriters to better manage their own books of business and workload, the workbench can encourage greater collaboration across teams. The upshot is that a well-implemented workbench can be the catalyst for improved individual and team productivity – manifested in increased profitability.

BENEFITS OF THE WORKBENCH

Integration with existing systems. Built well, the workbench will integrate with legacy systems and offer future optionality. Whereas previously, an underwriter might have needed to switch between screens to retrieve and analyse even the most basic information, a workbench presents that in a user-friendly way. Within a few clicks or taps, an underwriter can bring up relevant information about a case, broker, or client, including active flags on missing information. They can navigate deeper into these views as their needs dictate. And they will be able to start this on an office laptop, continue on their mobile phone or tablet via an app on the train on the way home, and seamlessly pick it up on the laptop again.

Data and analytics. Leveraging internal and external data sources is par for the course for the more tech-enabled insurers. A good workbench will, of course, ingest internal data and present it in a digestible format. However, a great workbench will add external data sources, will incorporate AI-enabled analytics, and may allow tailored interrogation via business intelligence tools. The data used is not just restricted to quotes or existing business and claims experience. It can extend into compliance information such as KYC and, most excitingly, live sources which proactively inform the underwriter of potential risk factors or even upcoming claims events.

Automated workflow. An early workflow application is proactively flagging missing information, but this can be extended to the likes of preventing overshooting underwriting limits, i.e. the maximum liability apportioned to the underwriter or that an insurer is willing to assume from its underwriting activities in total. An underwriter approaching these limits will have options such as rationalising outstanding quotes or passing the business elsewhere in the team. Further possibilities include prompts for proactive contact about upcoming renewals, in turn reducing declines due to missing information or changes in limits or ratings. When connected to auto-renewal and auto-decline tools, which use automation and straight-through-processing after a quote request, the workbench can alert the underwriter to the status of these more straightforward cases.

Monitoring and team management. Offering different features and access rights has huge implications for real-time team workflow management. Head Underwriters can look across their whole team and book of business to assess performance versus appetite, understand how long it takes to quote-and-bind, including factors such as incomplete information, and interrogate information about brokers. By incorporating controls as set out by corporate policies, the workbench creates and stores risk, regulatory, and compliance data. Being digital, it can also provide timestamps for audit purposes; an unobtrusive device that provides further assurance in a regulated environment.

IMPLEMENTING A WORKBENCH

In our experience, prior to implementing a workbench, it is vital to be clear on the reasons for the adoption. A key consideration is whether the workbench is the fulcrum around which change revolves, or the cover that wraps around end users to cushion them against underlying change. Whilst there will be a multitude of priorities, we believe they can be allocated to three primary drivers which, in turn, dictate what and how the workbench delivers:

  • More profitable underwriting
  • Increasing efficiency
  • Increasing distribution

These are not mutually exclusive, of course, but Head Underwriters and CIOs will need to work out the optimal combination of benefits, such as deploying enhanced analytics, leveraging scarce specialist skills, and improving service to brokers and customers.

Once the business case is clear, the design and implementation steps come to the fore:

  1. Identify and engage with the users early in the design phase and map out the relevant journeys. Consider how the workbench can change these interactions and processes – do not assume that they need to follow the same flow as today – and which training or socialisation may be needed.
  2. Use data analysis and user surveys to identify data or information available for the workbench to ingest and present. Such data may be unique to the insurer. This is an opportunity to create new information flows and to codify informal arrangements, for example, manual spreadsheets that have crept in as a result of data process shortcomings or user frustrations.
  3. Harness the power of the data revolution. Whilst insurers can call on external data sources today, the degree to which this is done effectively and dynamically varies. A workbench can be built to call on real-time external data directly from multiple sources and allow the manipulation of that data within the tool.
  4. Establish how the workbench can integrate with processes and workflows – existing or future ones. To reach its full potential, the integration must be seamless. Adding layers or awkward detours to user journeys and workflows is unlikely to improve efficiency or help specialists to focus on where they are needed most.
  5. Identify the architecture that will support the workbench. This needs to be done in step with any user journeys, workflows, and processes which the workbench will replace, augment, or interact with. As well as considering cloud versus on-premises, insurers need to understand the state of their legacy architecture across which the workbench sits – as well as any plans for upgrades. APIs offer a solution, but in some situations, one cannot assume that legacy components will be API-ready. To harness external data, the same question needs to be asked of external sources, of course.

Underwriting Workbenches are a well-established construct, and the current convergence of technology and business drivers opens up possibilities to evolve your capabilities exponentially. Insurers need to be careful, though, not to rush in and be tempted by all the “bells and whistles”. In order to capitalise on these opportunities, underwriters and CIOs need to stay focused on their specific key drivers, seamless integration, and an engaging user experience.

In the future, we can expect Underwriting Workbenches to become increasingly central to the workflow within insurance companies. As the sophistication and reach of automation and digitalisation increase, the workbench will provide a nexus for working on, monitoring, and controlling a greater proportion of an insurers’ book. With evolving technology, activities that sit outside the workbench today, such as pricing engines, could be performed within its parameters. Well-designed workbenches will allow underwriters to capitalise more efficiently and effectively on the potential offered by improved data analytics, access IoT technology, and plug into initiatives such as Lloyd’s of London’s Blueprint Two (a technology-enabled insurance marketplace). Integration with these and other dynamic data sources, both internal and external, will allow not only better-priced risk but also more proactive risk management.

 

Gareth Miller

Principal Consultant, Financial Services

Gareth has 20 years’ experience in a range of Financial Services roles including as an industry consultant and a stint at the regulator. During that time, he realised that he enjoys helping solve complex problems through technology, rather than simply highlighting them. Since joining Endava, he is well-positioned to help clients manage competing priorities and achieve their objectives. To take his mind off all this complexity he enjoys exploring the countryside with his family, or solo on his mountain bike. He also home-brews a decent beer.

 

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