Underwriting’s Role in a Profitable Insurance Business


– [Andy] And hello everyone And welcome to today's webcast, Underwriting's Role in a Profitable Insurance Business

This event is sponsored by Appian and Insurance Networking News Today's insurance underwriters are under constant pressure They have to make fast decisions about which risks to accept and how to price them Yet the data underwriters rely on is often sent by e-mail, fax or mobile devices Or else resides on backroom systems using multiple platforms

Doing the data in different forms and from disparate sources makes critical tasks like data validation difficult, further inhibiting speedy and informed underwriting The advent of more complex and specialized risks from aviation to terrorism also add to the growing challenges for underwriters They are often faced with having to compromise thoroughness and risking profitablility in order to respond quickly enough to gain market share But technological innovations have also created new opportunities for insurance underwriters to grow business by better aligning processes and data By moving to a common integrated platform that delivers data and processes to individual underwriters, insurance companies can add actionable intelligent decision making

And in today's webcast, we have three industry experts who will discuss how to balance speed, risk and return to drive underwriting profitablity and growth But first, I'd like to remind everyone that our presenters will be responding directly to your questions later on in the webcast, so if you have a question, please type it into the question field on your console, and then submit it by clicking the enter button We really encourage everyone to do this and we will answer as many of your questions as time permits So, right before we get going We have a poll question, which is very simple

There are only three answers to this one What line of business best reflects your focus area? So folks, if you could take a second Just click one of these radio buttons and press the submit button and we will get back to the poll results in a moment But first, I'd like to kick off our webcast with Deb Smallwood Founder and partner of Strategy Meets Action

Deb is highly respected throughout the insurance industry for strategic thinking and thought provoking research She has a long record of helping insurance companies rethink, re-energize and retool their IT infrastructure for profitable growth and differentiation Insurers and solution providers turn to Deb for guidance on business and IT linkage, strategy and architecture Deb has deep industry knowledge and experience in specialized understanding of distributions, portals, agent connectivity and underwriting automations She is also a frequent contributor to leading insurance trade journals and a popular keynote speaker at major industry conferences

Today, Deb will discuss the significant changes effecting insurers and how the role of underwriters is evolving to create new opportunities Deb, let me just bring up the poll results here for you, and the floor is yours – [Deb] Great, hello everyone Thank you, Andy I'm thrilled to be part of this webinar, as many of you that might be on the webinar

Underwriting automation, especially in commercialize, is a real passion of mine and it's really been somewhat of a professional mission since my early days in 1989, 1990 when I worked on business re-engineering initiatives at Liberty Mutual and also worked on a project called An Underwriting Work Station, if you can believe it or not That was on an Apple Macintosh computer back in '89, '90 And so I'd seen and have seen the vision of underwriting automation and it's really amazing as we're in the 21st century to be where we are So today, I'm going to give you my perspective on underwriting and try to create that picture of that next generation underwriting model So, I'm going to be sharing with you some strategic insights and some SMA research

We did ask the question, I don't know if we saw it I don't recall seeing the poll results We asked the question around what line of business and if you look it was mostly P and C requests and I'm looking at the attendees and we do have some life and some health folks on the line I guess when you think about underwriting automation you really have to look at today, the lines of business and you also have to look at the levels of automation And what we tend to see in personal lines is high-volume automation where there's no underwriter at all and you can even see some of that in term-life and you even see that in small commercial

My conversation, and I believe the majority of what we're going to be talking about is not only the underwriting process, but it's that role of the underwriter and when an underwriter is needed So, even, even for simple personal lines risk, right? There are exceptions that things get bumped out And so it's really that work of that underwriter in their day-to-day of what tools and technologies and access to data that they'll have, so that's why we teed up that question Before I get started, Strategy Meets Action, Strategic Advisory Firm, I'm the founder of the company We provide a variety of services, consulting, advice and research to insurers and solution providers

At the bottom, you can see the variety of topics that we cover and part of our mission is really to influence, guide and consult with insurers and solution providers to create that next generation insurer We believe that there's so much opportunity around us and so much change, that we have to start rethinking the business of insurance and you'll see this next-gen insurer model a little further into the presentation I'd like to start off with talking about some of these external influencers that will force us to rethink our underwriting businees model And, at SMA we track these external influencers and this year we decided to call them the Four Top Game Changers And the four are significant capital

What we mean by significant capital is there's a lot of outside money on being invested in, what I would call, disrupting the industry So there's VC firms, there's hundreds of start-ups, according to CB insights, up to two billion dollars was invested last year in start-ups specific for insurance So start-ups are start-up insurers, start-up MGA, start-up brokers, there's start-up technology, technologies for comparative raters, technologies for customer experience and even technologies for risk assessments and helping us mitigate risk And when you see a lot of money from outside coming into an industry, you know that there's disruption in the horizon And so, many are betting on disrupting and I would say not let others disrupt us, but let's seize this opportunity, right? And we also know that other game changers are changing expectations, customer expectations

So that's policy holders, agents, brokers, MGAs And even the role of the underwriter and the role of people in the underwriting department We have new generations and even some of the baby boomers have different expectations in terms of how they interact with companies And we also live in this digital transformation world, right, we live in a connected world that's all digital that really is enabled by our mobile devices that have only been mainstreamed for maybe five, six years And, so the impact of that, and the presence of the digital world is as you can see, putting pressure on our industry

And last we have an assortment of emerging technologies and new sources of data And the emerging technologies are somewhat physical So it could be sensors, internet of things, and wearables It could be drones, it could be driverless cars Or it could even be somebody's virtual technologies like artificial intelligence, bio-technologies, semantic technology, some of these things that are more virtual

But at the end of the day, these emerging technologies are gonna create an amazing amount of actionable movement of data, new sources of data that is gonna influence our products, the way we underwrite, the way we price and the way we service So, when you look at these four external game changers, they're putting pressure on insurance and what better way to really think about underwriting, right, and create opportunities and just manage those threats So, just to reiterate, the opportunities are these changing expectations is gonna create some new coverages and new products that will start to put pressure on our underwriting department and it's gonna really force us to improve our operational efficiency, so if I go through these slides, some of the pain points and the manual handoff that we have, if we're going to start to have new sources of big data, new coverages, new products, think about the training How are we going to be able to do it in our world today, right? And we have to view these as opportunities Sure, there's new risks, there could be disruptions, there's gonna be new entries

You could even think about technology running amuck But I believe that if we look at this holistically, we can create a new underwriting model When we look at a next-gen insurer model, you can put in the context of underwriting So in the middle, in the center, we have to be innovative and really create a culture of change So, if we're looking at the underwriting department and it doesn't matter if it's life, P and C, specialty lines, right? We have to think differently about our customer

Our customer could be the policy holder, it could be the broker, it could be the agent A customer could be someone internally within our organization We know that we're gonna have next generation of products and services with these internet of things and sensors And we have to look at our business models How do we make money, how do we run our operations and take advantage of the technologies and the datas of such

And what this really gives you is really a connected view, or a connected lens of a next generation insurer or next generation underwriting department So, thinking strategically, right? Lots of opportunities, lots of potential When we look at our research of strategic investments, the industry is moving forward There is many transformation initiatives, in fact I believe over 40% of insurers state that they're in some type of transformation, let it be claims, let it be underwriting, let it be core system transformation or transformation from customer experience

What we're seeing is that 86% of insurers are investing in data and analytics And it's everything from master data management, to operational data stores, to warehouses, to applying new sources of data and some very few, are experience in a Hadoop, or big data platform But we're seeing movement there Many insurers are working on that whole customer experience and so would the implications of, of that to underwriting is possibly new channels, possibly providing self-service to agents and brokers, possibly providing some self-service capabilities to our policy holders And then we're also looking, we see the new products and services and small numbers down at the bottom are kind of playing around with internet of things, 24% and some type of pilot

But what I find really fascinating is that we're still in deep for core system replacement And 80% of insurers, both P and C and life and annuity, state that they're in some type of core system transformation, let it be that they're looking for funding, doing vendor selection, maybe in the first release, maybe three years in it and still working on many lines of business and many states But we're totally consumed by that And what we often see with core system replacements is the novelty, or the message that it will automate underwriting And we know for a fact that it does

It's policy admin systems are absolutely essential to create that platform and for those simple risks that I talked about earlier, those that can be automated and don't need an underwriter, sure it can prevent, it present, a work flows and rules that can create automation But what our research shows is that for complex risk, so this is complex middle market risk, those risks that require an underwriter, those policy admin systems only support 35% of the underwriting process So, let me say that again When you look at, even, this is not just legacy, this is a modern policy admin system, I have been, in the last year, I have seen anywhere from eight to 10 different site visits, watching underwriters with modern policy admin systems, working on large accounts, working on workout policies, or specialty policies, and the majority of their work, I would even say, even more than 65% of their work, is done outside the policy admin system Now that's not the fault of a policy admin system

Policy admin systems do a lot of capabilities They have the system of record They handle the transaction But it's all those tasks that they do as an underwriter is outside the realm, so it'd be fascinating, I think we have a poll question coming up, what percent of your system help support that underwriting process? And what's even more fascinating is that the pain points are still real and they're still the same pain points that we had back in 1989, 1990 when we were doing re-engineering projects at Liberty Mutual for middle market commercial, right? There's still communication delays between agents and underwriters, so back in '89, '90, we had phones We didn't have e-mail

So now we have e-mail, we have texting E-mail actually, has probably even created more complications in terms of delay So, we have delays We're still manual and paper driven processes Can you believe that? It's the 21st century, and for those that, or activities around underwriting

You know, last year I visited a system that, a company that just implemented a core system and it was a fabulous success But for those large work comp policies, what I saw was a manual paper folder with a checklist, a manual checklist for the underwriter So, we still have paper and then when they're done, they shred it, right? So, it looks paperless, but when the underwriter, they're still doing paper Still long turnarounds, lack of the right tools for risk and data analysis, limited visibility, a lot of times in policy admin systems, you can only see a policy It's hard to see that whole account view

And when we have manual processes and we have manual handoffs and paper, then you really have a trouble with consistency in compliance and discipline, right? So, it's really quite fascinating when I've created this chart and we've, this is based on research, this is based on surveys, this is based on interviews and observations It looks very similar to presentations that I made in 1989 on the re-engineering project So, it's really the time is right, right? The time is now for us to really rethink what that next generation underwriting capabilities are and (mumbles) I created the five I's And it, to me, it's around linking people, process and technology and I think you're gonna hear Joanne and Kate use the word connect And I believe it really is around connecting the company connecting the people, the processes and the technologies as well, so let's step through these five

What we have to do is we have to create for the underwriter, in the underwriting environment, those that are doing things outside of a policy admin system, they need intuitive desktop user experiences, right, that are really productive, focused and allows ease of doing business, but real intuitive That it brings everything to the underwriter instead of the underwriter having to go and look That there's intelligent workflows and rules engines, right There's intelligence built in based on the risk, based on the customer, based on the underwriter's level experience, based on the market, it could be a variety of things But we do have inavailable on the market, very robust workflows and rules engine

And it has to be interconnected, as I mentioned this whole connected company, right? It has to be interconnected You have to interconnect data sources, spreadsheets, tools, core systems, and you're gonna have to start to think about how you're gonna connect all those emerging technologies and all those new data sources that are gonna bring in And for the underwriter in that underwriting process, they need information and they need to be able to conduct that risk analysis and that's the piece that's really missing from a lot of the modern policy admin systems for complex risk is that risk analysis where they do the, really look at the financials, they look at the credits, they look at all this external data, they run different models, they do loss analysis and they look to see what the final price is and they can play with the levers and all those mods and experiences And they look at the policy in the context of the account in the context of the portfolio And it really provides insight for them to apply the right levels of, what I would call, real-time, actionable analytics and insights to that risk in real-time

Instead of underwriters keying, re-keying information into spreadsheets to do loss analysis So, five I's, really important, to me, if you're gonna look at any underwriting automation in the marketplace, those should be top on your list And what I'd like to do is end with, really a call to action, right? So, there's three main things for the call to action One is, embrace change Understand that we may be looking at today's world and insular world, inside out, looking at our underwriting processes, but don't lose sight of some of those things that I talked about up front

The emerging technology, changing expectations, the whole digital connected world that we live in and all that significant investment that's happening on the industry because there are game changers happening that will impact our products the way we price, the way we underwrite and service our customers And really start to get really clear about what does next-gen underwriting look for your company, right? And start to think beyond the policy admin If policy admin is part of your roadmap, that's great That's, that really has to be foundational, some of these legacy systems and the batch mode aren't gonna do much, right? But be mindful that the solutions out there on the marketplace really don't have the capability that we're talking about And start to link and think and connect the people in the underwriting department

The people in across the company in claims and loss preventions that work with underwriting Then, connect the agents and the brokers and the policy holder with your processes and your technology That's all I have I'd like to hand it back over to Andy I believe we have a poll

– [Andy] We do, we actually have two, and here's our first one, Deb Does your company have an underwriting platform or workbench place? And again, we have three simple answers to select from So, I'll ask our viewers to quickly vote and hit submit because we don't want to dwell on this screen too long – [Deb] And let me just, let me just clarify this So, I didn't talk much about a platform or workbench, but do you have technology for underwriting that sits above and around the policy admin, right? So, do you have one that sits across everything? In all your core systems and all your tools, do you have many different tools, or you really don't have any automation, so sorry, Andy

I wanted to just clarify that question just a little more so people know how to answer it – [Andy] Not at all, good to have that there So, let's look at our results Split pretty evenly, I'd say – [Deb] Yeah, so that, that makes sense

Our research shows that the majority of the large insurers, those that are the market leaders and commercial lines, they have that one system that sits on top of all their product lines and all their systems We know that many have many tools That's about 1/3, which makes sense And there are many that don't have anything That it's all manual on paper and Excel spreadsheets, unintegrated, not integrated with a policy admin, so this is a good reflection

So, we have lots of opportunities for 2/3 of the industry, right? – [Andy] Definitely Let's go into our next poll, or second poll here How much of your underwriting activities in a typical day in your life, would you consider supported by the workbench? – [Deb] So, remember, I talked about 35% being supported by a policy admin, so this one is around the workbench So if you've got some underwriting tools, how much of that role of the underwriter and that underwriting process is supported by that 65% that we're looking for? – [Andy] Uh, here we have your answers Looks like most are between half and 2/3

3/4 – [Deb] Yeah, so Yeah, I think it aligns, right? So, it aligns to that one system 1/3 had about one system over everything and we have about 36% at the 55%-75%, so that aligns Again, still lots of opportunities for us to improve Great

– [Andy] Well thank you, Deb Yes, and thank you, Deb Smallwood for your presentation Next up, is Joanne Currier, VP of Information Technology at Vermont Mutual Insurance Company Joanne has more than 30 years experience in the information technology field as a staff, programmer, analyst and development manager She is active in the IT committee of the Property Casualty Insurers Association of America and is a former President of the Wheatley Insurance Systems Customer Board

Today, Joanne will discuss how Vermont Mutual has evolved its agency portal to deliver agility in responding to change, integrate seamlessly with third-party data sources and communicate better with customers She will also show how Vermont Mutual has implemented a one-stop shop for underwriters to access all the information they need to evaluate risk and support profitable growth Welcome, Joanne – [Joanne] Thank you, thank you very much, Andy Good morning everyone, or good afternoon everyone, I should say

I guess where I'm starting on my slide is that I am trying to follow up with what Deb's comments were Deb made some key points that are very consistent with where Vermont Mutual is as well and I think that I'm all ready Is my slide, am I on the wrong slide already here? Sorry, guys This is where I want to be So, I'm taking Deb's slide

And you can see at the bottom, I've put some plus signs where I think we're doing well and in an area that's yellow is where we need to improve So, just backing it up a minute I want to make a point that when Deb talked about these pain points, they definitely are consistent with Vermont Mutual We haven't solved the world's problems We have a lot of work ahead of us

We're still in the early phases of this implementation But they asked me to put together kind of a, an explanation of some of the things that we're doing that are a little bit different than most of the other carriers are doing And in the area of the agent and underwriting communication delays, we're really looking at, and I know many of you are in different ways, and I would like to reiterate that there's more than one way to solve a problem and also that no way is an easy way But in the agent and underwriting communication delays, obviously, we're trying to do real-time rating wherever we can We want to have dynamic screens that present only the information and questions to our agent that makes sense for what they're writing

We have a lot of cross edits and rules that are built into these engines now that basically, if you're, if it's an ineligible risk of what Vermont Mutual isn't going to write, the agent sees that right up front before they submit the business, so that kind of leads into the next portion where everything as much as possible, right now we're focusing on our personal lines first, cause that's our greatest volume We're trying to get everything as electronically submitted by the agent as we possibly can, so our new system allows them to attach copies of the application, any photos that they have, and all of that feeds into us electronically The way that the questions are worded in the application and then the, excuse me, the quoting and then into the application process We're getting a much cleaner application, but we're asking simple questions We're not asking questions that they typically skip over, so we try to make that process as easy as possible for the agent

But meaningful for both them and for us Which then helps us in the back end on our underwriting discipline, which the last bullet there A lot of our business rules, or our business, our underwriting discipline, is being executed through those rules that helps, it automatically fires in wherever possible We do have the straight through process and then we're trying to refer only the exceptions This also, in the back end of the system here now, what's happening is that underwriters used to have to review the entire application to understand what the risk was and now with the business rules, they're able to see the results of the business rules and they're very targeted to what it is that they have to follow up with

So, they can be on the phone and talking to the agent and adding value with those exceptions, rather than things that are clerical The other points I wanted to make is the long processing time Obviously, our target is to be as real-time wherever possible Getting those clean submissions so we eliminate those rework cycles and that's the back and forth of, "Oh, they don't have this complete thing" It stays with the agent until they're ready to submit the information

Deb spoke a little bit about all the different data sources that exist We're not doing anything that's rocket science here We're integrating with the common ones that you all are But we also anticipate that there's gonna be different ones as time goes on and we want to have a flexible and scale enough solution that allows us to not only meet the needs of today, but also allows us to do better and be adaptable to that as things go on We prefill, or present that data wherever we possibly can

So, the area that we're still working on because we're in an incremental rollout is the area of the multi-line accounts and and the books of business We just don't have everything connected for that yet to do single view of the customer But that is certainly on our radar to do The next slide, I just want to talk a little bit about all the different various puzzle pieces that we all have There's the common ones that I've outlined here with the portal and scanning and indexing and how we get our information

We all have some sort of back off, a system that supports the policy administration data But as they talked about, there's a lot of changing expectations in the future technology that's gonna come in We again, we want to have something that we don't have to keep, we can just change out some of these puzzle pieces and replug in and that are, we will still have a connected solution So, some of these are commodity issues that we all need to consider, but we need to kind of be mindful of the fact that, well, in our case, we deal through an independent agency channel So, in some cases, whether I do, whether I, whether we create a very fancy dancy system, it doesn't matter if our agents start their workflow within their agency, the agency management system, or their comparative rater system that might be really old technology

We still need to support those multiple channels and allow that data to come in and then populate our systems in a clean way and make that transition for the agent as seamless as possible, so that ease of doing business is a big, big, big factor So, again we have to deal with the old and the new technology of our business partners, whether it's primarily our agents, but there's a lot of third parties that are out there that they aren't necessarily adapting to the modern systems as quickly either So that's always something that is a road block for a lot of us Going into the next scenario, what I wanted to talk about was the modular modernization and being connected There's a lot of actions that we now unify with this technology that we're using a platform that we're using in trying to keep a lot of transparency within the business

So, within our new technology, we are trying to connect the people, the processes and the technology We are using the Appian product It is a mobile enable product It is a tool, it's not a product that the solution was built out of the box, so there's a lot that we have done and invested time and energy and worked very closely with our business on the process that we want Trying to streamline that effort for both the underwriter, making it easy for them so that when they get the information that they need, they're not doing that clerical overhead work, but that they're, the time that they're spending with the agent is in support and adding value rather than, like I said, that administrative overhead

So, that underwriting price and service, all of those things factor into what we're trying to do here with the technology I think the next side speaks a little bit more with what's been set up with Appian We have these new capabilities This is the technology stack that we're running on our architecture is a service oriented architecture We also have, we have, we're using the Appian platform

We're using that for our user interface The basically, the end BPM and the look and feel, and basically the way we describe it is, Appians is kind of the brains of the operation, so it kind of anticipates and keeps track of whatever is coming in for intel from the agents and passes it downstream to the workflow process Corticon is the business rules engine that we're using that replaced a lot of the business logic and edits that were previously stored, hard coded in programs And this allows for that easy change in rules and cross edits that we're talking about So, a lot of our user manuals, underwriting manuals, a lot of the rules have been interpreted, so things like the coastal rules, there's just certain things that it will display and it just makes it a lot easier for the agent so that they don't have to be referring to the manual, although that's quickly available

We try to have as much available within the UI as we can so that they don't have to go looking for stuff And then again, the connected part is where the underwriting can be there to add the value to help them with, maybe some of the new coverages that we have if it's not clear We have some things that come up that you couldn't do these combinations of endorsements because you hit picked our enhance endorsement and you can't pick this other combination, the old combination that you could do kinda more as a mono-line coverage So, that's been very helpful as we transition and add some enhancements that it's a lot easier for them to understand There's actually at the end of the process, not only do we present a nice, clean proposal for them that they can use that's printable and easily redirected through e-mail or whatever channel that they want

They also get some cross-sell information that does some comparisons of the coverages that they chose for some of, against some of our new enhanced coverages that we're pushing, or promoting or marketing that helps them understand better the improved coverage that they have So, that would be just a better example of some of the value add that we're seeing with some of the new technology that we're able to do From the customer communication channel, we're using a tool called Dunderhead Some of you may have that as well That's allowing us to not only replace our policy output on, and have some scalability and flexibility with our distribution customer preferences and also to the agents

Where some agents still want their paper and some do not Also as we move forward with our customer portal on the service side, we will have more opportunities available for them to, for our customer, to shut off their paper, or go to the electronic billing So, that's more of the platform of what we're setting the stage So within this This new display that I have up now, the Appian world is a lot that we've invested with this tool because there's a lot that happens with the tool as they continue to develop it as technology changes We need to keep the tool set updated, but it's very easy to adapt to the changing technologies that might come in So that's been extremely helpful and then like I said, this is the Corticon rules, really help with simplifying the information and I think that having that clean, easy way to do business is really important With the reporting and alerts and analytics through the BPM process, which is a business process management tool, we're able to gather better metrics so that we're able to track where the piece of business might be, how many things are going through straight-through processing, how many things are stopping through certain edits that we think, "Oh, why do we, why are we touching that? "That doesn't make any sense

" And we can refine that rule and let more go through so that the things that are referred are the things that are meaningful touchpoints with the agent The collaborative workspace You know, underwriter having the rules, they can review of what fired to the process just makes it easier to communicate with the agent, saves them a lot of time and it makes that turn around time easier I would say that underwriting in a connected world, we're trying to add that value supporting our agency, our customers, our agent, is the primary in the scenario that what I'm describing, and not the clerical overhead and the importance of that ease of doing business Having that clean, straightforward, intuitive process

So I'd like to, my last slide, just wanted to reiterate that there is no silver bullet for any of us There's no easy path where you pick package or solution

Or this type of strategy, but these key areas that we're trying to do is making sure that we had ease of doing business and that allowed us to balance between maintaining our underwriting discipline to the ease of doing business We don't wanna impose too much hardship on the agent as we're trying to submit the business But we want it to be more of a partnership in the agile framework that we've set up We want this to be very scalable because the world that we live in, the technology is changing at such a rapid clip that we need to be responsive to that and so the plug and playable methodology that's in place with this framework is really gonna be a tremendous help to us being able to do that as things continue to change And just stressing the point that our rollout, our rollout strategy is more of an iterative process because we wanted to be able to implement this and then continue to change it

So, we're rolling out by product by product So at this point, I think I'm going to turn it over to Andy and he has another polling question – [Andy] Thanks, Joanne and we do This is our final poll Do you think you could benefit from a more connected work environment? Simple yes, no or maybe

So, it will be interesting to see how our audience feels about this If they're feeling connected enough presently, or if they're looking for more connectivity And here are the results Resounding yes What do you think Joanne? – [Joanne] Ja

or Deb, are you surprised by that result? – [Deb] No, I mean it's obvious, right? The story that, this is that flout that I painted and then Joanne talked about, we're not surprised It's a matter of getting it really prioritized and funded and moving forward, but I think everyone gets it That's great

We're all onboard – [Andy] Okay, well, moving right along Our next and final presenter is Kate Gingras, who leads the Dynamic Global Rapid Growth Insurance Business unit at Appian, a Gartner Magic Quadrant leader Kate is a business technology leader with extensive experience in improving the performance of insurance organizations She's worked across personal, commercial, life, pensions and reinsurance markets and more than 12 countries to achieve revenue, expense and compliance goals

Over the past nine years, Kate has focused on delivering transformative technology solutions that align operating models with digital agendas Kate will discuss the concept of connected underwriting and how it provides a platform for integrating people, information and processes She'll also shed light on how Appian Solutions can accelerate the move to a connected enterprise Welcome, Kate – [Kate] Thank you, Andy

Hello, to everyone on the phone and on the webinar This has been a super interesting topic We hear frequently in the insurance market about connected cars and connected homes Connected devices that give us insight into health and people's fitness and eating habits But we generally don't hear about connected companies

It's becoming a very, very prolific topic If for no other reason that the outside world is connected and the minute they reach inside, they realize how disconnected we all are So, when we think about friction with connection inside of our companies and the value and the time that that brings back to each of us in our day, it's not necessarily surprising to hear Deb's statistic about the 65% that are, the work, that's really not being connected There's an interesting study out there that talks about what being disconnected costs our companies each day And it of course varies by line of business

There's a lot of lines, like Deb said, or there's a lot of products that, at this point in time with available data sources, might allow us to in the first instance and say, new business areas to be able to go straight through But that doesn't negate the need, or risk mitigation, risk analysis, to either the life of that relationship or renewal decisions that are going to come up Or looking at risk from an entire book perspective So, the underwriting components don't ever go away Even if, though automation of new business, in a theoretical automation of renewals, seems to be moving towards straight-through

It absolutely varies by multi-national It varies by some of these specialty risks that we see growing in a high-net worth area It varies by mid-market commercial lines But the underlying evaluation is that at about 65, and the study's actually about 69% of what we do, is e-mails looking to get data in context Manipulating data, re-entering data

And again it may not be in just one particular area, right, for the new business It could be throughout the underwriting processes, the underwriting discipline The e-mails that we send to external parties to take action The e-mails that we send to one another in the company because there's no system that connects us There's a lot of value in terms of time that we all get back to invest in that which we do best, right, which is to underwrite and protect the profitabilty of our companies

So, there's three capabilities that we generally look at in becoming a connected company One is, simply, giving us information Data in context I spent an awful lot of time going and looking for data because we want context I think Deb mentioned that it's hard to see an account in context

Joanne even mentioned having that 360 degree view It's tough to get It's tough to get something in context, so we're constantly searching for the data that will give us the information that we want And to borrow from a, probably an overused example, Google's really good at giving us information None of us need to know, necessarily, how much data underlies

The second capability, once we have the information that we need that puts us in context continuously, is the opportunity to then take action And what does action look like for all of us in a connected world? It's gonna vary It's gonna vary by line of business and it's gonna look, vary by the estate The gadgets that you use, the evaluation tools that you use, all the levers that Deb spoke about But the actions broken down to and centering, being unified with the information, the must-dos, the can-dos, the I wanna-dos

And those that we say, there's gaps in the current estate that an application should be able to do But moving away from disconnected spreadsheets, moving away from disconnected systems, moving away from paper as much as we can, to be able to again, automate some of this work Whether it's humans, or whether it's system, and taking action in context keeps us connected A lot of times we hear people say, "Well, I gave someone that report "I give them that report so that they have X in context

" But when you ask them where someone then goes once they're informed to do, they go to many other different systems to take action But you have to come together to keep us connected internally And the third capability that we look at, and Joanne spoke about, was to work anywhere To being able to work on the channel seamlessly Whether work is coming in from our portal, mobile devices or on our desktops, seamlessly working across in context and being able to take action anywhere

Rather than being tethered or connected to a desktop, or the portal being disconnected to everything else in the organization And it's not just about being able to work anywhere It's being able to work any time So we should be able to jump into work because we have the information, and then take action Wherever something is along the continuum, whether it's new business, whether it's something that's been started, whether it's something that I need to look at, we should be able to jump in wherever we need to jump into, whatever time we want to jump into it and have it in context so that we can pick up and contribute our part to the bigger piece of work and not component of collaboration of everyone coming together

The people, whether they're inside or outside of the organization, they're contributing to it The data and the processes that we need to run together to contribute to it, all come together across any device, to keep us connected to wherever we are And in these connected environments, Joanne's point, people get a lot of time back because that 65% of the time that we spend collecting information, calling someone, e-mailing, it doesn't all go away We might still need to perform a certain function of that We are still humans

But we really get the time back to focus on what we do best and what we're hired to do for companies So, with that, I'll turn it back to Andy for any questions – [Andy] Okay, well thank you, Kate And we do have some questions coming in, but I would encourage our audience to please submit more questions and any that we don't get a chance to address in today's event, we will get back to you on So, please send them in

We have a question from John I guess this is probably geared to Deb He wonders, "How is the 65% that you referred to "manage for complex risks?" – [Deb] Yeah, so it depends on that underwriting platform, underwriting technology that is enabling that So, for that small percent that we saw in the poll and what I would see in the industry, many have an underwriting work station, or an underwriting workbench, or what Kate talked about, like an Appian platform that sits and helps facilitate and bring all that connected information and processes together Some actually purchase underwriting work station software and some build it themselves

But those, those that don't, and by the way, those technologies are usually tightly integrated with a policy admnin system, but those that don't have any technology, it's spreadsheet, it's e-mails, it's what Kate talked about, right? It's hunting an e-mail, going on shared folders in intranet services, typing in spreadsheets and tools and hunting and searching and doing Google searches So, it depends, but it's a variety of different things – [Andy] Okay, and I have a question from Paul This would be for Kate, I think He's wondering, "How quickly are companies "jumping at the chance to use Appian within their company "and is this a competitive market?" – [Kate] Is the, I think the insurance market is incredibly competitive depending on the lines of business that you're in, right? So, personal lines is becoming marginalized and very, very competitive

There's other lines of business that are growing exponentially, so companies are starting to pivot towards different markets We're seeing micro-insurance on the rise, we're seeing specialty on the rise So, I do think, and by default then, if everyone pivots and moves, the market's becoming incredibly, incredibly competitive In terms of Appian, are people jumping for Appian? I wish the world were jumping at Appian Companies are still struggling, I think, with where they want to connect and what connectivity means to them

So, folks are spending, as I mentioned, and focusing a lot on this concept of connected homes, connected cities, connected sensors on refrigerators, it's whole block chain concept that's going around IOT, and a lot of times they're missing the opportunity that's right in front of them, which is to simply connect their own organizations So, it's a concept that's taking on rather quickly Like, IOT seemed to, to sort of jump up very quickly I presented in December at one of the first IOT conferences here in the U

S and have now participated in four more And historically, the insurance market hadn't really talked about IOT So, I would draw the parallel between speed to interest to the speed to IOT and people really moving towards things they're gonna pivot their business quickly and quite simply – [Andy] Okay

I have an interesting question here from Hudajet This may be for Deb "What is the role of cognitive learning "future underwriting, if any?" – [Deb] Oh, I think there's great possibilities, right? This whole cognitive and machine learning, which will help with our discipline and some of the consistency that we talked about I think we're a ways from that We still struggle with a lot of the processing and underwriting and this risk analysis to use external new sources of data and models

We're really good at that for out of some homes, some small commercials, some term life But I think the possibility is amazing to be able to use some of these new technologies, but I don't see that in the next couple years Maybe some proof of concepts – [Andy] And I have a question for Joanne from Kevin wondering, "What's the difference between "the underwriting workflow system you started "at Vermont Mutual and what you have now?" Or the "with the underwriting workflow system "you started with and what you have now?" – [Joanne] Well, I don't know that we really had much of one to start That was part of the problem I think that it goes to case point about the connectedness and the lack of connectedness in all the different places that we needed to go to make those decisions And it required a lot of clerical assistance to be able to get data in to be able to be presented in our older system

Where now, it's either, either is a better decision point that's presented to the agent when they're placing the business or administering services against the business But also more importantly to the underwriter that they are pointed to the data that they need to see to be able to make those decisions and some of the things that are more commodity type coverages that we know pass the rules and there's a profitable growth that we want and it's good They just go right through So, that's that would be my answer to that one – [Andy] Okay, thanks I have a question from Sarah for Deb, and that is, "What tools or technology do you see "companies providing to underwriters to help them handle "the work that the systems that they have do not help 65% of the work?" – [Deb] Right, I you know, I think I already answered that and that was tools like Appian, business process management, workflow, rules, sophisticated rules I see another question in here around the integration, so you need something that can manage information and data and data hubs

And some are buying package softwares and some are using tools like Appian that have those really sophisticated rules engines and workflows – [Andy] Okay, thanks And then back to Deb, a question from Vivian "When companies talk about being connected, "what do they mean? "Are they talking about connected with the outside world "to the insurance, into the insurance company, "or connected within the organization itself?" – [Deb] You know, so, it could be either and I think Kate did a really great job talking about that So, we're starting as an industry to talk about the connected world and the internet of things and conceptually starting to understand that concept

I think the term connected company, which I love, you know, just in talking with Kate, I think it's a great concept because I think it's a new concept, but it's one that should stick because we tend to think silo and the underwriter has to work in a connected department, in a connected company in order to provide that ease of doing business to any customer So, I think it's a new concept and I hope it starts to mature quickly – [Andy] Okay, I have a question I'm not sure who wants to take this I'll throw this out to the field

It is, "The pushback I always receive "is the issue of potential job losses "as a result of introducing "the cushion technologies, the business processes "What's your view on this?" – [Joanne] I can take a stab at that Because as we're rolling things out, I mean, I think that anything, any time the word automation comes up, people immediately think, "Well that means they're going to do my job" So, there's a lot of, with the transformation of these tools and this connected world, it's not only the technology that's transforming, it's our business that's transforming So, what we have found is that, people that usually had traditional roles, or clerical roles, are being cross-trained and being grown within our organization to take on a higher level job, which is really good

But, they, you can't help human behavior People assume things based on certain words and just things of the past, perhaps, but the reality is I think you have to be continually transforming and kind of reinventing yourself and this is a highly serviceable industry that we have to be able to, that responsiveness, there's not everything can be 100% automated and so there's always gonna be those things that need to be done and the better that that can be, I think the person that came in that did the same ol', same ol', there's always people that want to do the same ol', same ol' and there's people that want to grow And I think there's a lot of opportunity with the transformation and especially with attracting new talent that we have to bring in I think it's hard to bring people in that just wanna do clerical They wanna have something that they're thinking and making decisions and being part of a solution

So, I think there's great opportunity – [Deb] I'd like to just add to that So, that's one view which is an important view Automating some of though, the you know, raters, data entry, but the role of the underwriter If you make, as Kate gave some of those statistics and I talk about the 65%, what they're not doing is portfolio management, what they're not using is trying to understand why certain trends are happening in their book of business and applying analytics and wisdom in business intelligence

They don't have the time to do that, right? So, if we can eliminate some of the redundant, manual, really basic tasks, of even some of the more like underwriters, just think of the different activities that they could do to, that will bring us back to the topic of this whole presentation which is all around underwriting profitability – [Joanne] Right, totally agree with that – [Andy] All right, then We have time for one more question and then we'll wrap up This is from Ken

He wonders, "How much work is building the integration "between the underwriting platform "and policy administration, lab vendors, "document management, underwriting rules, et cetera?" He says, "We found this is the hardest part "regardless of which tools sit on top" – [Joanne] Absolutely true The lion's share of the work for this, the projects that we're working on are web services and we clearly underestimated some of that effort and I would say that's what's causing some of the longer turnaround times for our implementations The tools sets are great, but you have to, the Devil's in the details of tying everything together for those things to work, so Appian's ready for it But, it's gotta be past that information, or has to know where to send it downstream

So, that is definitely without a doubt, Ken, the lion's share of what our effort has been from illustration – [Andy] Thank you And that is about all the time we have I'd like to thank everyone for joining us today on our webcast, Underwriting's Role in a Profitable Insurance Business and we've hoped you found this session valuable And of course, I'd like to thank our presenters, Deb Smallwood, Joanne Currier and Kate Gingras for taking the time to share their insights with us today and a special thank you to Appian for sponsoring this web seminar

This is Andrew Mazer and on behalf of Insurance Networking News, thanks for joining us and have a great afternoon

Source: Youtube


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