Underwriters will be ‘dead in the water’ in 10 years

Underwriters will soon be “dead in the water” with data becoming more prominent in the insurance industry, according to Hubb Insure’s chief operating officer Ed Halsey.

Halsey said relationships were too prevalent in the sector and claimed that “all things are better done through data” during an Insurance Times roundtable – sponsored by Kainos – last month (28 March 2023).

He made the statement after being asked for his opinion on Blueprint II, Lloyd’s of London’s programme to deliver a digitalised marketplace for its members.

Lloyd’s chief executive John Neal said in March this year that Lloyd’s had made “great progress” on the £300m digital revamp project and will continue to “deliver at pace” in 2023.

But Halsey said that while this was “undoubtedly needed”, Lloyd’s would “not be leading the technological advances”.

“It’s bringing them vaguely up to speed with where everyone else was 10 years ago, still miles behind,” he said.

“And even if they deliver all of this, they’re still going to be miles behind.

“[This is] because everyone else is going to move – they’re just really trying to get a baseline put in place to get them trading relatively efficiently.”

This prompted Halsey to claim that, with data becoming more essential in the insurance industry, underwriters could soon become a thing of the past.

He added: “All things are better done through data.

“There’s way too much relationship stuff that goes on in the insurance industry and actually it’s often to the detriment of the customer.

“We like to think that underwriting is a dark art – underwriters are dead in the water, underwriters won’t exist in 10 years’ time.”

‘Only a mirror’

The comments came as the growing use of data science continues to transform the way the insurance industry analyses the risks it covers.

Rachael McNaughton, technical product lead with a focus on analytics and machine learning at broker Willis Towers Watson, said the industry had made real strides in its use of artificial intelligence (AI) and machine learning over past years – but that there was more to come.

Recently, it was reported that insurer Zurich had been experimenting with ChatGPT and exploring how it can use artificial intelligence (AI) technology for tasks such as extracting data for claims and modelling.

However, Phil Williams, chief operating officer at The Clear Group, felt underwriters would continue to exist despite technological advances in the industry.

“I think humans are super important from an ethical point of view with data and AI,” he said at the roundtable.

“They’re only a mirror to the data that’s put in them.”