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From manual to modern: the insurance industry's call for automation

Operations

3 minutes

Pricing and underwriting processes simply take too long. Outdated processes and inefficient systems waste the time of highly skilled underwriters and actuaries, hampering innovation.

Editor's note: This article is an excerpt from The State of Speciality and Commercial Pricing report, based on research conducted by independent research firm Coleman Parkes on behalf of hyperexponential.

Underwriter or data entry clerks?



The average quote to bind time is one to two weeks, although this varies by line of business. Shockingly, underwriters spend on average three hours each day on data entry – that’s almost two days a week lost to unnecessary manual processes.



Just under half of the underwriters surveyed said populating pricing models takes at least a week, with one in five reporting it takes as long as a month. A third of underwriters are suffering peer review processes that last on average three to four weeks. Only 1 in 10 have that process down to less than two days.



If insurance embraced and leveraged automation at the pace of other industries, underwriters could unlock huge potential 
 to focus on more complex and evolving
 risk landscapes

Actuaries hampered by unfit pricing tools

Building and releasing a new pricing model takes almost 200 days on average for Specialty and Commercial actuaries in the US versus 150 days in the UK. Even a simple parameter change takes on average 23 days to implement and database changes take an average of 57 days.



Whilst these lead times could demonstrate adequate amounts of due diligence from actuaries, it may also indicate a lack of agility to offer new products. Unfit pricing technology is drawing out processes for actuaries that should be significantly quicker.

Automation has delivered productivity gains to most other industries, but digital transformation has come late to insurance, and the consequences are clear.

The current state of pricing tech means actuaries and underwriters cannot do their jobs effectively. 56% of actuaries and underwriters claim their organization’s current technology limits their work. Meanwhile, 53% believe current pricing tech prevents their organizations from responding to a rapidly changing risk landscape.

To prepare themselves ahead of the hard market turning, insurers must invest in technology that can truly empower their underwriters and create real-time actionable insights. Some forward-thinking Specialty and Commercial insurers are already on this transformation journey. Others are dangerously complacent.



Time to deliver on promises


Over-promising and under-delivering is accepted by many in the insurance world as ‘just the way it is’. 17% fail to see any problems at all, believing their current technology is 100% perfect and does not require any improvement.



But, as other industries benefit from modern technology, there is a growing sense of frustration among insurance professionals who wonder – “why can’t it work here?”

To learn more, explore the full State of Specialty and Commercial Pricing 2023 report now. Download it here.

For the US-specific edition, download The State of Commercial P&C Pricing 2023 here.