Future underwriters must become skilled statisticians, engineers and technologically literate if insurance is to meet the needs of consumers and businesses according to a new report by the Underwriting New Generation Group (2021) of the Chartered Insurance Institute (CII).
The report said the traditional skills required of underwriters were analytical in nature. As a result, sought after candidates mostly had science, technology, engineering and mathematics, business or economic degrees.
The group’s report which is based on research that included a survey of members of CII’s Society of Underwriting Professionals plus interviews with chief underwriting officers and HR directors, found that to be successful as an underwriter in the future a more diverse set of digital analytical skills is required.
The group’s research has revealed that there is a growing school of thought that advocates splitting of underwriting roles, differentiating between technical and trading or development roles.
The report said if the underwriting profession is to keep pace with the changing needs of consumers and businesses then insurers need to make targeted investments to enable the migration to a more future-forward technology stack now that can support a two-speed IT architecture alongside programmes focused on talent acquisition and upskilling.
The report said to make the underwriting profession fit for future purpose the following strategy could be adopted:
New and existing underwriters should adapt and develop new skills alongside their core underwriting abilities to effectively collaborate with data specialists.
The required skillset would include the understanding and use of pricing models, data analytics, portfolio management and data manipulation.
Upskilling should be the preferred method when there is enough time to plan, train and execute.
External recruitment, specifically for skilled hires, should be considered effective in the short-term when time to execution is critical and the suitable candidate needs to hit the ground running.
The group said if adaptation to the changing climate of skillsets is not quick enough, insurers are not only likely to lose their staff but also to see their top and bottom lines impacted.
CII Underwriting New Generation Group 2021 member and senior strategy associate of Aon Inpoint Marcus Li said, “Up to 30% of underwriting roles could involve greater interaction with data scientists and the use of quantitative tools. Another 30% of roles could be automated, reducing manual and routine tasks to free up workforce capacity to attend to more value-adding business questions.”
CII interim CEO Jonathan Clark said, “Clients and underwriters alike will reap the benefits of data-driven methods of monitoring exposure and mitigating losses, as well as using ever enriched claims data to drive better underwriting decisions that legacy rating methods would measure short against.”