1.
CPCU ANNUAL MEETING
Future of underwriting
September 2016

2.
TECHNOLOGY IS DRIVING SEISMIC SHIFTS
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3.
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1. The Manual to Digital Shift
Driverless cars Smart machines with ability to think Wearable devices
Technology is fundamentally challenging assumptions about what is a machine – covering all aspects of life making work easier, simpler,
better – almost like a super-human assistant
There is a superhuman assistant for all your needs….

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2. Mobility and Flexibility
Technology is changing how things are done , mobile work from home, closer collaborations – sharing screen data, editing one
video, one document being worked upon by multiple people, social networks
Time and place no longer matter – anywhere anytime is the buzz-word
Source: Citrix.com

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3. Immediacy
Instant gratification – 24 by 7 convenience, faster way to do everything, simpler, objective interpretations, on demand,
information at finger tips
Everything is available at a click, on demand

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4. Nature of Data is Changing
Simpler, visual, aggregated, easily available, greater ability to learn big data, complex data is
turned into meaningful bytes easily, businesses using big data, 3D imaging – data is more real

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5. Many in One – The era of more
Multi-tasking, ability to be in many places at once, as geographical distance does not matter,
automate tasks, connected devices with one touch control, smart home appliances

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6. Time is the new currency
Time-saved is money saved, improvement in productivity, time efficient technologies, everything
is faster than before - automate tasks to save time, smart CRM systems, paper to online, get all
data in one place for a meeting to start

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7. Open cultures – less hierarchy, less predefinitions
Roles are not strictly pre-defined, more collaboration, ability to cross-task,
functional and organizational hierarchies are disappearing, less formal,
social networking, collaboration tools

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8. The Workspace of Future
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Fast, Information at a Click
Ease of Collaboration
Manual to Digital
Segregated to Integrated
Time consuming to Within minutes
Individual to Collaborative
Formal to Flexible
Textual to Visual
Cluttered to Simplified

11.
LEADING TO CHANGE MAJOR CHANGES IN INSURANCE
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12.
Expectations: Insurance Innovation
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Source Hype Cycle for P&C Insurance, 2016“, Gartner, June 2016
Expectations: Insurance Analytics
Next 2 to 5 Years
• Advanced Analytics Solutions
• Insurance Data Models
• Agency Portal Solution Digitization
• Use of Social Media
Next 5 to 10 Years
• Smart Machines
• P&C Insurance APP Store
• Telematics
• Insurance Data Models
• Wearables
Expectations: Near and Mid Term

13.
Insurance will be disrupted!
• Internet of Things (IoT)
• Drones, Autonomous Cars,
Telematics
• Big Data & Artificial Intelligence
• Genetics & Wellness
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Smart
Machines
2
New Paradigms
3
Non Traditional
Competition
• Property/Title centrally registered –
globally (Blockchain)
• New Risks appear, some dissapear
• Switch on/Switch off coverage
• Consumer channels
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• What are core capabilities for future success?
• How will you prepare and when do you move?
• What impact does it have on your Capital?
• Social Insurance (Crowd sourced)
• Non-Insurance entrants
• Re-Insurers

14.
HOW WILL ROLE OF THE UNDERWRITER CHANGE?
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15.
Evolution: Commercial Insurance Underwriting
Manual Automation
• 2x Underwriting
Productivity
• 2% Loss Ratio ↓
• 0.5% Expense Ratio ↓

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How underwriters have been traditionally
- 70% time spent on low value tasks
- Trouble getting information in one place
- Swivel chair and integration issues
- Challenge comparing data from multiple sources
- Communication gaps when collaborating with experts and brokers
Solution: Work Smarter

17.
TECHNOLOGY
&BIG DATA
REQUIRE
RETHINKING
YOUR
APPROACH
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18.
WAKE UP!!!
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19.
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8
Experian,
Lexis Nexis,
PAS
Call Credit,
Telematics….
Unstructured
EXTERNAL
INTERNAL
PAS,
Datawarehouse,
Claims,
Billing…...
Search, Aggregate, Analyse, Visualize and Learn Processes Transformed
1. Case Underwriting
2. Renewal Analysis
3. Portfolio Analysis
4. Data Validation (e.g. Quote
information validation, Automated
Premium Audit for WC)
5. Form Filling (e.g. Enabling B2C SME
Business, Quick quote, etc.)
6. Large Loss Investigation
7. Proactive Marketing
Structured
EXTERNAL
The Future of Commercial Underwriting

20.
*Includes machine learning and deep learning
Descriptive Analytics
What is happening
Confirm
Hindsight
Analytical
Technique
Outcome
Process
Traditional Approach
Form
Theory
Observe
Data
Diagnostic Analytics
Why did it happen
Predictive Analytics
What is likely to
happen
Form
Theory
Foresight
New Approach
Observe
Data
*Identify
Pattern
Prescriptive Analytics
What should I do
about it
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Commercial Underwriting

21.
Fundamental: Transformation of Risk Assessment
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• Statistically Similar Unique Risk Propensity
Looking Backward Looking Forward

22.
Evolution: Commercial Insurance Underwriting
Manual AssistedAutomation
Artificial
Intelligence
• 2x Underwriting
Productivity
• 2% Loss Ratio ↓
• 0.5% Expense Ratio ↓
• 5x Underwriting Productivity
• 5% Loss Ratio ↓
• 1 – 2% Expense Ratio ↓
• 10x Productivity
• 2x Growth
• 10 – 15% NCOR ↓

23.
• More strategic
Understand the big picture about customers and
hence predict desirable leads, cross-selling
opportunities, messaging
• More innovative
Help with product development by defining
requirements, pricing frameworks, key trends based
on third party data and customer behavior – unique
insights
• More customer centric
Build and enable a “team approach” to account servicing
via collaborative tools and democratic information access.
Leading to better solutions and increased customer
loyalty.
• More data savvy
Machine learning, AI and big data enable to use analytical
approach to improve precision and new kinds of data
prediction and predictive modeling.
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The Evolving Role of Underwriter
Source : E&Y
Underwriter of tomorrow will straddle multiple roles, beyond the current job predefinitions.

24.
Underwriters of The Future

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27.
Expectations: Insurance Innovation
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Source Hype Cycle for P&C Insurance, 2016“, Gartner, June 2016

28.
Expectations: Insurance Analytics
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Source Hype Cycle for P&C Insurance, 2016“, Gartner, June 2016