Richard Hartley: Are we prepared for underwriters’ roles to change?

You would have to have been living under a rock to not notice the impact that technology is having in the insurance industry.

These advances have provided benefits to customers through speed and access, but their impact on those working in the sector is more of a double-edged sword.

While automated data collection systems have improved the efficiency of those working in underwriting, their increased deployment has also necessitated a reskilling of many employees to adapt to new ways of working.

Cytora is an insurtech firm that works alongside the commercial and specialty insurance sector to digitise and streamline their workflows, allowing underwriters better control over risk selection and decision-making by providing the data that’s needed.

But with these improved capabilities comes a “transformation”, says Cytora chief executive Richard Hartley.

He explains: “Many tasks that are currently performed manually, such as data entry and rekeying, will be automated. Those repetitive, menial tasks such as sieving through data and reviewing data fields can take up to one third of the average underwriters’ working day.

“For insurers, there’s a clear incentive to streamline this process as it vastly increases efficiency and enables their skilled risk professionals to concentrate on higher value work, such as evaluating complex risks, refining portfolio strategy and deepening broker relationships.”

However, Hartley adds: “At a basic level, many underwriters will soon find that their job becomes less admin-focused and less monotonous. At the same time, the skills they need in relation to interpreting data, making consistent high-quality decisions and thinking of creative solutions will vastly increase.”

New skillset

Hartley believes that the technological changes underway in the insurance sector will require underwriters to undertake, “at the very least, a basic data education”.

He notes the rapid advances of artificial intelligence (AI), especially around its capacity to extract and generate risk insight data for underwriters.

“Put simply, the next generation of underwriters will be much more data-savvy,” he adds.

“This includes applying the insights created by data analysis in a creative and thoughtful way. More specifically, generative AI will create new roles, such as risk flow engineers and risk flow experts – people who know exactly how to extract the most useful outputs and continuously optimise these platforms.

“Then there will be underwriters, who will use the time that has been freed up to further develop their broker relationship skills and develop a broader portfolio view.”

Hartley believes that “monolithic” technology stacks are being supplanted by “modular” systems that fulfil specific purposes, meaning that underwriters will also have to become “more flexible in the way they work, able to upskill and adapt to different tech solutions”.

Curious mind

So, with the changes coming down the road, what can the underwriters of today do to prepare themselves for increasingly digitalised roles?

Hartley says he believes the most important thing to internalise is the need for “a curious mind and the will to constantly update your expertise”, rather than envisioning a simple “checklist of skills you really need to learn”.

He adds: “My advice is to always read about the latest trends in insurance, technology and business in general, talk to different people about what they are learning and, above all, work out what developments and opportunities really inspire you.”

Moving from how individuals can prepare to what it is that insurance firms should be doing, Hartley explains that preparing for the future involves more overlapping thinking and a recognition of what changes are coming.

He notes: “If we look at one aspect of the underwriter’s role that could be developed further – broker relations – we can see how broadening those relationships may lead to more overlap and the need for close collaboration with an insurer’s business development function.

“Furthermore, faster feedback loops between changing levels of risk and market conditions and portfolio appetite will mean that underwriters need to be adept at identifying emerging risks and opportunities in real time aggregate data and make continuous refinements to portfolio strategy.

“As volatility increases, the agility to identify changes in risk and operationalise refinements to portfolio strategy will become increasingly important.”

Hartley says that he thinks underwriters will also have a place in the insurance industry, but that their roles will need to adapt to the increasingly volatile and technological world that they operate in.

He finishes: “Underwriters are going to be met with such complexity and varied scenarios that they will need to be able to both effectively leverage the technology around them, but also be able to come up with unique approaches to finding solutions to understand, manage and transfer risk.

“There is no textbook to tackle the challenges we are going to face over the next few decades – the most creative underwriters will be the ones that will create it.”