Leveraging the power of emerging technologies in the insurance sector is no longer just about incorporating them into the organization. It’s also about reinventing the insurance organization and its culture — to drive innovation, transformation and the business into the next generation. The ongoing convergence of new technologies including artificial intelligence (AI), robotic process automation (RPA) and blockchain, has the potential to spur positive disruption and growth for insurance organizations. But in this period of exciting change, there is one compelling question all insurers must consider: Can we effectively train and lead our people to embrace and leverage emerging, intelligent technology?
Recently, Arun Balakrishnan, CEO of Xceedance expressed his views on technological innovation and the impact on markets and specifically on the role of underwriting. Arun focused primarily on the London market, but his observations are essentially universal. The “Wired Underwriter” article sheds light on the growing concern insurance companies face as to how emerging technologies will affect today’s workforce – and possibly even create an alternative workforce comprised of smart machines.
Balakrishnan accepts that the level of process automation will increase within the next five years but maintains that human production will remain an invaluable component. As he explains, “We see the ideal workplace scenario as one where the machine or software which performs that manual task provides the staff member with two or more options. So the role of the staff member will be to make an informed decision based on those options. That is the next stage.” In other words, by combining the best of what machines and humans have to offer, the next level of intelligent technology sets the stage for the insurance workforce and its organizational roles and responsibilities to become more informed and effective.
The key will be for people to adapt their skills so that they can work in tandem – rather than in competition – with emerging technology. According to Arun, “the world is changing and people’s mindsets need to change with it. Professionals, especially newcomers to the insurance ecosystem, should seek out new skills, such as programming. Those who fail to adapt will find it harder to keep their jobs.”
He advises that insurance workers should seek out ways to automate all possible manual processes so that their time and efforts are devoted to more complex technological and analytical problem-solving. Drawing a link to the now obsolete profession of typists, he predicts “It is going to be the same with software programming, which will not be regarded as the specialist skill it is today.” He goes on to suggest that if insurance workers use automation to “free up their time from having to do menial, mundane and repetitive tasks, their wealth of knowledge can be put to use to make machines and software even smarter.”
Underwriting is one specific area in the insurance domain where Arun envisions significant changes. Presently, to assess risk, the function fundamentally relies on the same underwriting questions and due diligence devised in the 1970s. He explains how in the present model “a motor insurer, typically, reviews how many miles their clients have driven, along with their accident record and age. Their answers to such questions create a risk profile and the client is charged a certain amount of premium.”
But new sources of rich data combined with new technology calls for a new method. “The real transformation will begin when insurers can disregard the underwriting principles of the past and use the new-age sources of information to enable insurers to price most individual risks with relative precision.”
While acknowledging, it is difficult to predict the exact nature of future workforce dynamics, Arun is confident the insurance industry and Xceedance will harness intelligent technology to help the industry to enter “a very different era of underwriting compared to today.”
Read the full article here.