Adding AI to the Underwriting Equation

Aug 4, 2020 / by AAIS

In a special edition of the AAIS Webinar Series, CONVR VP Sales and Marketing Phil Alampi presented on the topic of "Artificial Intelligence: Creating Super Underwriters." Mr. Alampi discussed the growing impacts COVID-19 has had on insurers. With more than 75% of carriers seeing increases in business interruption claims, the demand for coverage is expectedly surging. This growing challenge has a positive side, however, for the impacts of COVID-19 have expedited the need for the industry to improve its ability to crunch data better and more efficiently.

Mr. Alampi introduced the term "Super Underwriters" -- underwriters who are focused, deliver bindable quotes, have a consistent approach, are relationship-based, quote more, and love their job. Super underwriters are needed now more than ever as the current process leading up to a quote is time-consuming, often rife with errors, and plenty of friction in handling.

Through the utilization of automation and Artificial Intelligence (AI), the underwriting process can be greatly simplified.

Currently, underwriters engage in a constant back and forth with agents and brokers. Underwriters search third-party sources for additional information and verification to augment what they know about the client. In an age of instant gratification, consumer expectations are vastly different from those of insurers. Artificial Intelligence can help solve this issue. AI is "automation on steroids," according to Mr. Alampi, giving carriers the ability to do things they would never have dreamed of beforehand.

When combined with underwriting, AI provides a solution to the convoluted workday of underwriters. The constant back and forth, paperwork, and mis-typed and misrepresented information is no longer an issue.

With AI, agents and brokers can leverage automated submission intake, build a business profile, and answer underwriting questions. AI eliminates the need for manual searches and answers underwriting questions within the appropriate program. Submissions are then scored, digitally quantified and prioritized, and ultimately sent to the proper organization within a carrier. In the end, underwriters provide a quote more quickly, efficiently, and accurately.

While Artificial Intelligence removes unnecessary grunt work and errors from the equation, machines can only think “within the box.” Underwriters cannot be erased from the underwriting equation. They need to assess the factors outside the "box", like the relationship with the broker, discretionary elements of business, and competition among clients. These are important facts to underwriting, but not something AI would be able to gather/know…yet. A healthy combination of AI and underwriters will decrease the manual work in insurance underwriting and ultimately save carriers time and money.

Mr. Alampi concluded with tips essential to successfully innovating:

1.) Build a vision and ask yourself what innovation looks like and how it will look given your company's current status.

2.) Solve a real problem; Identify the issues you need to fix.

3.) Solve multiple problems; kill two birds with one stone.

4.) Look for quick wins

5.) Adopt and build flexible solutions

6.) Change management.

 

Mr. Alampi believes innovation requires action and failure. Carriers need to take action now, especially during the COVID-19 pandemic. You cannot course correct with inertia; you need to "fail fast" and course correct. He likens innovation to a torpedo. Torpedoes are constantly redirecting and course correcting. Success is a zig-zag, a winding path that carriers need to take to meet insurers and insureds' growing demands.

Tags: Community, Technology, Machine Learning/AI, Issues & Trends, Data & Technology, Events, Regulatory/Compliance, Insurance Operations, AAIS Webinar Series, Underwriting, Regulation, Compliance, AI, AAIS Views

AAIS

Written by AAIS

Currently, underwriters engage in a constant back and forth with agents and brokers...To solve this issue, AI is essential. AI is "automation on steroids," according to Mr. Alampi, with AI giving us the ability to do things people would never have dreamed of, even in times with automation.

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