Tomorrow’s underwriters will have to become more technologically literate – even taking on some aspects of statisticians or engineers – in order to better meet the needs of clients, a new report by the Chartered Insurance Institute (CII) has found.
The report was produced by the CII’s 2021 Underwriting New Generation Group, based on the results of a survey of Society of Underwriting Professionals members, in addition to interviews with chief underwriting officers and HR directors.
According to the report, underwriters traditionally leaned toward analytical skillsets, hence most underwriter candidates had STEM, business, or economic degrees. But it also found that to be successful as an underwriter in the future, candidates would need a “more diverse” set of digital analytical skills which would allow them to utilise quantitative tools and handle big data.
“Underwriters need to be empowered with the ability to interpret data they either were not able to or did not have access to previously,” commented CII 2021 Underwriting New Generation Group member and Aon Inpoint senior strategy associate Marcus Li. “Up to 30% of underwriting roles could involve greater interaction with data scientists and the use of quantitative tools. Another 30% of roles could be automated, reducing manual and routine tasks to free up workforce capacity to attend to more value-adding business questions.”
Li added that the future’s new underwriters “will not become programmers themselves,” but instead will work with colleagues in newer digital and data-focused roles to create and manage underwriting solutions.
“Underwriters have had to be agile and respond to the new working environment and technology,” he said. “The requirement and demand for professional skills have not diminished, but rather augmented, becoming perhaps ever more important.”
“With the increase in use of data we are seeing a shift from underwriters being expected to detect and repair to consumers and businesses wanting the profession to help them predict and prevent risks,” stated CII interim CEO Jonathan Clark.
“Clients and underwriters alike will reap the benefits of data-driven methods of monitoring exposure and mitigating losses, as well as using ever enriched claims data to drive better underwriting decisions that legacy rating methods would measure short against.”
CII also found that due to the challenges around recruiting candidates that can fulfil both the analytical and behavioural aspects, there is a growing school of thought that is advocating for the splitting of underwriting roles to differentiate technical and trading/development roles.
If underwriters are to keep abreast of the evolving needs of their clients, the CII has recommended that insurers make targeted investments to allow the migration to a more “future-forward” technology stack now, which can support a two-speed IT architecture alongside programmes dedicated to talent acquisition and upskilling.
The CII concluded that to prepare underwriting for the future, both new and existing underwriters should adapt and develop new skills alongside their underwriting abilities to effectively collaborate with data specialists. Upskilling is the preferred method to accomplish this, particularly for new hires. Failing to adapt quickly in this “changing climate of skillsets” might result in insurers losing their staff, as well as impacts to their top and bottom line, the CII warned.
