The underwriter 2.0 – what skills will underwriters need to thrive in the era of AI

Richard Hartley, CEO, Cytora

We are currently seeing advances in AI and automation coming at a pace that is hard to keep up with. AI will become increasingly commonplace, more sophisticated than ever, and is already starting to have a transformational effect on the way we do business. The world of insurance is no different, and as these changes in tech start to impact the workplace, we are seeing a shift in the way that underwriters are able to operate. For those in insurance today, at the forefront of this transformation, the potential of the tech, along with the challenges that it brings with it, may well feel overwhelming – it represents a huge change from the old modus operandi in the industry, which until recently relied heavily on manual input. Underwriters are starting to recognise that they will need to adapt and in many cases acquire new skills to make the most of the technology available to them so they can thrive in this era of AI. So just how will we see the traditional skills of an underwriter changing?

A role that will evolve, not be replaced

The first thing to make very clear is that no machine is ever going to replace the human underwriter. It is a role that relies heavily on skills that robots simply cannot replicate, evaluating complex risks, refining portfolio strategy, creativity and crucially deepening broker relationships. But AI allows many tasks that have to date been performed manually and been time consuming, such as data entry and re-keying, to be automated. Those repetitive, more menial tasks, such as sieving through data, reviewing data fields, trying to identify missing data fields, entering data fields to different systems, can take up 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.

Data-savvy underwriters

At a basic level many underwriters will soon find that their job becomes less admin focused and less monotonous. With this comes a host of new skills that have never traditionally been called upon as an insurer now needed to maximise the potential of tech in the sector. This includes the skills they need in relation to interpreting data, making consistent high-quality decisions and thinking of creative solutions which will all vastly increase.

The most prominent manifestation of how the advances in AI are impacting the insurance industry is in the growing use of AI to extract and generate risk insight, streamline risk flows and enable data-driven decisions. To be able to make effective use of data – for example, to understand it, apply it and make decisions from it – you need to have, at the very least, a basic data education. Put simply, the next generation of underwriters will be much more data-savvy. This includes applying the insights created by data analysis in a creative and thoughtful way.

Agility and creativity

Technology more broadly is advancing at a pace and the old monolithic tech stacks are giving way to organisations employing combinations of modular solutions that fulfil specific purposes. These platforms can quickly evolve to fit different needs. Consequently, underwriters will have to be more flexible in the way they work, able to upskill and adapt to different tech solutions.

We are going to see faster feedback loops between changing levels of risk and market conditions and portfolio appetite which 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. Underwriters are going to be met with ever more complex and varied scenarios, with climate change, for example, having a huge impact on the insurance industry. As volatility increases, the agility to identify changes in risk and operationalise refinements to portfolio strategy will become increasingly important. Underwriters 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 be writing it.

Multi-functional teams

Generative AI may well lead to new roles within the insurance sector such as ‘risk flow engineers’ and “risk flow experts” – people who know exactly how to extract the most useful decisioning outputs and continuously optimise risk flows. There will be digital trading managers skilled in monitoring the health and performance of digital trading – providing critical human oversight. 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. 

Finally, greater digitisation and AI will create more unity between underwriting, data strategy and technology teams. What this means is that siloed departments will become increasingly untenable. The best organisations will have multi-functional teams enabled by digital risk flows where information flows throughout the organisation. Every team member will need the technical tools and expertise to work together.

The underwriting landscape is changing dramatically as a result of machine learning algorithms, data analytics and other AI technologies. Whilst learning more about AI and technology will be critical for success though, it is not as simple as saying there is a checklist of skills you really need to learn. Just as important will be having a curious mind and the will to constantly update your expertise and learn new things. As this transformative period progresses, we can expect to see a new breed of underwriter that has developed skills around data analysis, digital literacy and critical thinking, but who is also creative, flexible and adaptable in the way they approach their role.


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