Finding new ways to improve underwriting and insurance claims management has become a priority for consultant Finity’s clients.

Actuarial consultant Dylan Neenan says automation in complex lines reduces the burden of writing business by as much as 90%, while technology can also transform policy administration, quoting and premium calculation.

“Many of our clients are asking for new ways to improve underwriting and claims management,” he said.

“It’s become a real area of focus for Finity, as well as many insurtechs.”

In Australia, many insurtechs are underwriting agencies with a niche market focus, using technology to serve specific and often under-represented markets. Examples include pay-per-km car insurance, embedded travel insurance, or package insurance for microbusinesses.

“By targeting unique customer segments, they aim to deliver tailored insurance solutions and superior service,” Mr Neenan said.

He says insurers’ transition from “monolithic platforms to modular, Lego-block structures” has created opportunities for insurtechs to provide “plug-and-play" solutions.

“This approach enhances efficiency and flexibility, making it easier for insurers to adopt innovative technologies,” he says.

“But there’s still a need for a human lens to service segments effectively.” 

Personal insurance lines have significant premium volumes but are highly commoditised, and agencies competing in those spaces generally need a strong, technology-backed proposition to offer differentiation, Mr Neenan says.

Commercial lines offer more opportunity to address underserved segments such as specific occupations or high-risk businesses that larger insurers may overlook.

“For smaller agencies, focusing on a niche can be sustainable without needing billions in premium volume,” Mr Neenan said.

The value of artificial intelligence is “particularly evident in the streamlining of manual or error-prone processes”. AI helps to interpret underwriting guidelines and navigate complex processes, identify patterns in similar policies and recommend actions based on historical data, and transform processes in compliance and claims management.

“Collaboration between insurers, underwriting agencies and technology providers is key to driving innovation,” Mr Neenan said. “Each party brings unique expertise.”

Underwriting agencies often require support in areas such as market sizing, business planning and rate monitoring to remain competitive.