Achieving More With Digital
It’s no secret that Investment in digital/technology solutions is critical. If you don’t do it you’re already out of date.
That said, technology on its own doesn’t provide a complete answer and technology doesn’t solve every challenge.
Technology works best when a cookie cutter approach is required for certain tasks, but it cannot provide thought processes based on years of experience and industry knowledge that’s required for more complex matters.
As such, the combination of the intellectual capacity and experience of people along with the data harnessing power of technology are key to making the insurance ecosystem more efficient and sustainable.
It’s not one-size-fits-all
What technology can achieve also varies hugely between classes of business and distribution models. For some (e.g. personal lines) a complete digital solution is very achievable. For others, it can be limited to pulling in data from external sources to simplify the underwriting process and contribute to consistent underwriting decisions, but we still need underwriters to analyse the information and make decisions.
Over time, technology will undoubtedly change certain roles, and it’s that’s an important note: change, not replace. Underwriters will likely get to use their experience to analyse risk information rather than reading proposal forms (because a machine did that for them or an API pulled the data in from a remote source).
But most MGAs know that already. However, too much focus is put on underwriting and claims handling. It is easy to see how tech helps us better understand risk, which – obviously – is vital to successful underwriting and policy management. It is also too blunt a tool to allow for the nuances of policy terms and conditions, for example. Tech and people together makes for the best quality client experience.
Tech as a Weapon in the War for Talent
Many/most underwriters complain about the lack of technology provide by their organization and the impact that has on their role. Over time, investment in modern technology will become a key factor in where employees choose to work. A business is also more appealing to talent when they embrace cutting edge technology in, indirectly, investing in its people. And in a market like ours – where it is getting increasingly difficult to attract and retain the right people – this cannot be ignored.
Easing the Regulatory Burden
Finally, and crucially, effective use of technology can reduce the regulatory burden on MGAs. There is a strong sense in the market that regulation rules continues to increase, and a concern that the associated costs will make it hard for smaller players to remain profitable. Deployed properly, the right technology can help alleviate the pressure (and reduce costs) by automatically implementing rules to provide data and/or prepare relevant reports that support regulatory reporting.
In short, digital is about much more than improving underwriting processes. It’s about business survival.