By Accenture Insurance Lead Australia and New Zealand Marianne Hutchinson.

Over the last few years, insurers have rolled out many new technologies to keep up with market demands. For insurers focused on innovation, artificial intelligence, robotics process automation and data analytics have all become critical tools for underwriters today.

While insurers are starting to deploy more technology than ever to improve efficiency and drive new growth, recent Accenture research found that underwriters feel optimistic about these new tools but are also concerned about their ability to use them.

We’ve seen a slower uptake of new technologies in Australia, with traditional operating methods slowing the interest and investment in recent trends. This is shifting fast as consumer behaviour demands change, and macro risks, like climate change, challenge industry players to reinvent how they work.

With rising competition from insurtechs and other rivals set to intensify, insurers must invest in the right technology that leverages their workforce. Finding the balance between human ingenuity and machine collaboration will enable businesses to meet consumer and employee needs alike.

Technological explosion

Insurers appear to be leading the way in adopting forward-looking technologies, with 75% of life underwriters rating the quality of their companies’ underwriting superior, with the same percentage awarding the same rating for their use of tools and technology to make underwriting more efficient.

What insurers are doing with these technologies is remarkable. With the explosion of data now available to them, they are using AI, machine learning, and data analytics to mine this data to understand their clients better, thereby generating much clearer risk profiles. They adopt modern third-generation underwriting platforms that incorporate automation to reduce and streamline administrative tasks, like administrative tasks and data inputs. Those platforms also offer the added benefit of data integrity and insights at the point of need, so underwriters can get deeper insights in real time.

Integration will be key

However, underwriters are saying that their workload is increasing while the processes are improving. The technology is being implemented, but it’s not yet fully integrated. Underwriters say that despite automation, they spend about 40% of their time on non-core and administrative activities. While automation is helping, underwriters say they can’t overcome inefficient legacy systems and a lack of data integration across systems.

Equally important is training. About 40% of underwriters cited insufficient training as a top concern. This will only be compounded in the immediate future by the worsening talent shortage and the aging insurance workforce. The value of technology is limited if workers don’t know how to use it properly. Furthermore, the traditional apprenticeship model is becoming irrelevant as automation increasingly handles what would be entry-level underwriter cases.

What is needed is a reimagination of the underwriting workforce. Businesses will train on this reimagined workforce and become proficient in new underwriting platforms that include built-in data analytics and predictive models. It will know how to underwrite medical risk, be technology-savvy, and understand how the data drive decisions. It will understand why AI refers cases to the underwriter and have a deep understanding of the data behind those referrals.

How to get there

Accenture’s research shows underwriters are eager to learn and embrace new technology, with 94% of respondents citing their top priorities to be improved training and skills development, along with improved tools for rating and processing risk.

Insurers will need to invest in a talent strategy to deliver a future-ready workforce. They might invest in the existing workforce, borrow talent from external talent pools, automate tasks using bots and AI, and/or buy talent by hiring individuals or acquiring organisational functions.

This will require investments of both time and capital. In the interim, insurers should consider establishing an “underwriting analyst” position, partnered with data scientists to continually test, refine, and maintain new models while insurers upskill their workforce.

The goal

Insurers that will thrive in the future will find the right balance between human ingenuity and machine capabilities. They will know how to make them complement each other while making each other stronger. They will understand how AI and automation can enable human ingenuity to flourish, benefiting their companies and their customers.

As Australian insurers upgrade and integrate their systems and empower their workforces to work with them, insurers are poised to maximise human and technological potential.