Underwriting in a New Digital Age for Commercial Insurance

Underwriters in the commercial market are, in some ways, facing a promising future: Valuate Reports recently estimated that the segment’s compound annual growth rate through 2028 would be 8.5 percent[1] – arguably a healthy clip by any standard.  This is far above the overall average Direct Written Premium (DWP) growth rate of 3-4% over the last decade or more.

Yet market research indicates that while commercial carriers are adopting digital technologies and next-gen core systems at a rapid pace, age-old manual underwriting processes and lack of relevant data when they need it continue to cause bottlenecks and friction, leaving customers, underwriters and brokers frustrated.

Businesses insurance premiums are now at $350 billion annually[2], but the workflow generally remains paper-based. Only 25 percent of an underwriter’s day is spent on selling and broker engagement. Underwriters are spending entirely too much time on core processing and other non-sales work.[3]

Imagine if underwriters could spend more time with their customers and focus on delivering a better customer experience instead of being bogged down by cumbersome, error-prone manual processes and information gathering? Imagine having intelligent, relevant information pushed to the underwriters’ fingertips at the exact moment they need it, empowering them to make better decisions.

As an industry, we are on the cusp of taking the necessary actions to make this vision a reality. SMA research[4] indicates a gap between what insurers do today and what is needed today and in the future. In fact, 80 percent of insurance executives expect underwriting roles to be significantly different in the next five years than they are today. They know they must evolve underwriting to make their companies competitive amidst the rapid changes in customer needs and expectations, new digital technologies and data sources, and increasing competition from both established players and new entrants.

This new evolution will be powered by a next-generation underwriting workbench that leverages a easily customizable and scalable digital platform, robust data ingestion capabilities, AI and machine learning, and new communication and collaboration tools across   commercial and specialty lines of business.

Majesco’s Underwriter360 leverages a next-generation underwriting workbench that uses a digital low-code, no-code platform with those goals in mind.

Underwriter360 rethinks the traditional underwriting process. The reasons for rethinking have been right in front of us for years: The volatility of the P&C market, customers and carriers have been seeking new digital technologies to speed up the underwriting process, growth in new data sources, every party wanted to make commercial underwriting easier, and the entire processes has to be more cost-effective.

Majesco Underwriter360 is a cloud-native Software as a Service, automated, insight driven underwriting workbench meant to enhance underwriting efficiency. It was developed to address the pain points that continue to hamper commercial insurance underwriting. In addition to tedious, time-consuming tasks of manually gathering data, the most glaring “Pain Points’’ we think are:

• A lack of an integrated and unified viewfor underwriters to access risks and make quick decisions
• The absence of holisticpolicy data at a single place to enable quick and accurate underwriting case management
• An over dependence on underwriters for making key decisions
• The lack of sufficient timefor underwriter to develop relationships with distributors, given inadequate system capabilities
• Inefficient collaboration and communication channelsbetween underwriter and distributors
• A need for constant follow ups with line managers for updatesresulting in longer wait for closing out open cases leading up to poor experience

Making progress on eliminating the pain points we believe depends on the creation of an end-to-end underwriter workflow and case-management capability. It requires a capability for intelligent data ingestion and extraction, coupled with standardized and automated processing. Further, the Majesco solution includes an automated data “prefill’’ through the Majesco “EcoExchange’’ marketplace.

A vital key in making underwriting work better, faster, and in a cost-effective way is increased and predictable collaboration between the broker/agent and the underwriter, along with what we call “pre-integration with Majesco Policy’’ for submission, quotes issuance, and documents.

The business value includes satisfaction for customers, brokers and underwriters, powered by digitally enabled and scalable technologies. And, Underwriter360 rests on carriers being highly responsive to customers while creating truly transparent collaboration between underwriters and brokers. Further value comes in the form of becoming a profitable underwriter and is derived from having centralized digital solutions. Ultimately, there is great value for the business by being highly responsive to customers through transparent collaboration among underwriters and brokers.

Next-generation underwriting capabilities are here. The challenge for the industry is in adopting a mind-set that permits digital transformation to take root and grow.

We believe performance excellence will flourish when insurers embrace change, leverage powerful new technologies, and adopt new ways of working that are evolving at a rapid pace.

KPMG and Majesco have a strategic relationship to help carriers leverage Majesco’s Digital1st® Insurance platform to deliver on differentiated UW digital capabilities.  KPMG’s Future of Underwriting thought leadership and Connected Enterprise framework helps insurance clients drive operational transformation, enhance customer experience, and leverage technological innovation to drive digital UW transformation.

Co-authors:
Mike Adler, Principal, KPMG
Denise Garth, Chief Strategy Officer, Majesco

Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities

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[1] “Commercial Insurance to See 8,5% CAGR Through 2028,’’ NJ Property Casualty 360, July 13, 2021

[2] “Commercial Insurance, Underwriting Priorities 2020, Chisel AI, 2020

[3] “The Rise of the Digitally-Enabled Underwriter,’’ SMA

[4] Ibid.