4299 Altus Insurance Whitepaper FINAL SPREAD - Flipbook - Page 21
Di昀昀erent classes of insurance have been managed
by di昀昀erent processes to cater for the unique risk
requirements of each, and as technology has been
gradually introduced over the years, the role of the
human in each of those processes has evolved.
While some are more automated than others, and
each follow slightly di昀昀erent paths, they all have one
thing in common – the human plays a crucial role in
the e昀昀ectiveness of the technology.
In Complex risks, while automation and AI have
started to pick up administrative tasks and even
started to influence risk decisions, the human is
still very much king of this realm due to the complex
nature of the risks and the hands-on approach
demanded by buyers.
Despite this, there is a divergence in the use of
technology between lead and follow capacity
providers – while lead capacity is calculated almost
exclusively by humans, the risk appetite for followonly capacity is becoming increasingly automated.
The use of technology is growing in this sector but
only if human thinking takes the lead.
In Intermediate risks, a much more hybrid approach is
found, where technology has assumed responsibility
for a large percentage of administrative tasks and its
role in supporting risk decision making, particularly
in less complex categories, is growing rapidly.
Technology has made signi昀椀cant inroads, but humans
are still central to most risk decisions.
In Commodity risks, a clear divide has opened up
between Personal and Commercial lines with Home
and Motor leading the way in showing just how far
technology can reach into the human domain. Risk
selection and pricing is almost entirely automated in
these markets but crucially, the inputs and outputs of
that automation are still governed by human thinking.
While digitalisation has been making progress in the
commercial world, automation has moved only so
far, recognising that the more complex the risk, the
greater the need for a human perspective.
Regardless of the class of business and
who its customer base is, the human
is – and will remain – crucial to the
underwriting process.
Regardless of the class of business and who its
customer base is, the human is – and will remain
– crucial to the underwriting process. In a truly
modernised underwriting function, the human will
always be in the underwriting loop, they will simply
appear at di昀昀erent stages depending on the class and
complexity of the risk.
Nuances in process between classes won’t disappear,
but in a fully optimised underwriting function,
commonalities in process between di昀昀erent products
can be identi昀椀ed and implemented to create great
operational e昀케ciency. Process mapping reveals those
commonalities, removing the need to create multiple
approaches to multiple products.
Optimising the feedback loops
The starting point for any modernisation programme
has to be the business processes. Leading with the
technology and then trying to 昀椀nd applications for
it, is similar to looking through the wrong end of a
telescope – it defeats the purpose of the tool.
Leading with the technology and then
trying to 昀椀nd applications for it, is
similar to looking through the wrong
end of a telescope – it defeats the
purpose of the tool.
Everything is interdependent, and when true
modernisation has been achieved, all functions
and processes constantly feed data back and forth,
helping to optimise individual and collective outputs.
These feedback loops are continually updating the
landscape that underwriters are assessing, allowing
them to respond more e昀昀ectively, more e昀케ciently
and in real time. It is these feedback loops, and the
business’s response to the information they deliver,
that power the engine of continual evolution.
While the underwriting engine of the insurer
locomotive is ripe for modernisation, it cannot be
considered or tackled in isolation. Process mapping
allows a business to understand how a particular
function operates, how it is supported or hindered by
activity elsewhere and how change to one part of a
process can have knock-on e昀昀ects elsewhere.
Processes that have been mapped out and
deliberately designed won’t only deliver e昀케ciency,
cost savings and increased productivity, they will also
create a business that can respond to customer needs
and market conditions in real time as each part of the
process is constantly feeding live data into the other.
There are far fewer blind spots or surprises in the
modern insurer, a business that is constantly on the
front foot. Rather than simply responding to change,
the modern insurer makes change happen.
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