With three decades of insurance experience to her name, Joanne Musselle (pictured), now group chief underwriting officer at Hiscox has enjoyed a front-seat view of how the sector has evolved over the years.
In conversation with Insurance Business, the industry stalwart shared insights into the skills she believes will define the underwriter of the future.
She noted that when she joined the specialty underwriting market through Hiscox, she was fascinated to see how so many of the decisions that seem to be judgement-based are in fact data-driven. One of the key transformations she has seen since joining Hiscox 23 years ago has been the shift to auto underwriting in the commercial market.
“What that has allowed is for the underwriter to spend their time on the judgement piece, and the parts that data can’t do,” she said. “Data and analytics can do a lot of things but what they can’t do is EQ, they don’t have empathy. So, for us auto underwriting is about working out when a risk needs something different, when a customer’s circumstances are a little bit unusual and an automatic quote won’t work meet their needs.”
Improvements in data and technology have allowed more creativity in underwriting because it has helped free their time for building the relationships that are the bedrock of the insurance market, and to focus on developing the core skills that technology cannot replace. And it is in that creativity that Musselle sees as the future of underwriters. “The underwriter of today is quite different to the underwriter of 10 or 20 years ago,” she said. “Meanwhile, the underwriter of the future is going to be completely different again.
“One of the main things we look, train and develop for is digital literacy. The underwriter of the future needs to be able to understand the digital world, data analytics and technology. It comes back to that creativity piece because we need people who really understand our customers, and are able to build products and solutions aligned to their needs.”
An ongoing area of focus is the move to expand understanding of the insurance proposition beyond traditional risk transfer to embrace more risk mitigation, and the opportunities to bolster customers’ resilience. That’s a key transformation that the industry both wants and needs to make, she said, and there are so many opportunities to use technology and data to support customers’ resilience, with flood and cyber resilience measures showcasing what’s possible.
Technology is instrumental in freeing up the time of underwriters to think more creatively about risk mitigation, not just among established risks but also the emerging risks against which it’s never too early to start building resilience. “We talk about encouraging our underwriters to be able to ‘see around corners,” Musselle said. “That’s about trying to get a view of the future which is going to be quite different from the past.”
Traditionally, insurance has tended to be quite a backwards-looking industry, measuring previous activity to price for the future. For some perils, the past is not a bad proxy of the future, she said, but for others, the environment is changing, and the risks that customers face are changing with it. In emerging areas, underwriters need to be really focused on what’s happening in the external risk environment and to use those insights to develop new products and new mitigation solutions.
“The other key skill is what we call ‘orchestration ability’, which is the ability to orchestrate across multiple different areas, both internally and externally,” she said. “That means our underwriting teams working closely with our claims colleges and our reserving colleagues to develop an end-to-end view of the insurance proposition which ends in the fulfillment of the claims promise… Because up until then, insurance is just a promise to pay. It’s the claims fulfilment where there is a chance for us to demonstrate to the customer the quality of the product they brought.”
In addition to these skills, there are a few core personality traits that Musselle believes will help define the underwriter of the future, many of which are similar to those traditionally required to succeed. The insurance industry remains people-focused, she said, and some of the traits shared by those people include having a natural curiosity and a growth mindset. A great underwriter is one who’s always thinking about tomorrow and what it will take to support customers tomorrow – and who displays the agility to pivot to meet those requirements.
“Having a growth mindset is really important for an underwriter, and that has always been the same,” she said. “The world is constantly changing and we need to change with it, so our underwriters need to be comfortable with that. And it comes back again to that creativity piece – we’ve always had to be creative in underwriting and the future will be absolutely no different.”
As to what has changed, Musselle highlighted how underwriting is now much more of a team sport than it was a few decades ago. “As someone who loves rugby, I liken it to rugby because there are 15 different positions on the team and each takes different sizes and skills, but the magic is when all those capabilities come together. I think insurance is a bit like that, there’s so many different areas in which to have a fantastic career, each requiring different skillsets, but it’s when they all come together, that it’s successful. So it has definitely moved from more an individualistic mindset to that type of ‘no ego’ team dynamic.”
The last piece of the underwriting ‘puzzle’ centres on team members having a clear understanding of the social responsibility they have as an underwriter. “Nothing would happen without insurance. You couldn’t build a hotel, or fly a plane, or sail a ship,” she said. “In having that social responsibility, we need to constantly think about new solutions, and how to understand new areas of risk, and find ways to solve them. An underwriter of the future needs to have that mindset, because the future is going to require creative problem-solving for some of these issues.”
