The new actuarial force

“We’re at the start of a new decade and something special has just happened. The healthy suspicion of technology that used to exist at the top of insurance companies is gone. Dissolved in the face of Covid-19, and the impossibility of running an insurance business with remote workers and without a sophisticated technology layer.

We actuaries got used to complex regulatory and compliance themes dominating insurance. But with new confidence in technology, exec teams want to create new systems. In a post-Covid world these systems should at least:

  • be a seamless part of the underwriting process, and not a cumbersome add on.
  • replicate the office environment and are more able to imitate the feeling of superiors looking over your shoulder – ensuring accountability
  • monitor and track workflow, not to mention record the underwriting process
  • intertwine underwriting and actuarial pricing and reporting

How do we start?

At Probitas, we focus on defining the business problem. For each new technology we develop a commercial proposition around the following five areas:

1. Product

New technology needs to reduce uncertainty for all stakeholders. For a Lloyds Syndicate, this means introducing features relevant to underwriting, but also claims, portfolio admin, compliance and reporting teams.

We’ve found the important element is actually integration. Using APIs as a secure way to plug-in to other collaborative platforms. Integration enables an efficient workflow. Single signup, quick processing and wrapped in security, which is fundamental in a regulated environment.

Processing can then take on a ‘cookie-cutter’ approach – calculations, tools, documentation and workflow can be easily adapted to suit the user, the line of business, the niche industry. With solid foundations, these adaptations can be easily recreated to benefit a specific niche.

2. Placement

New digital channels must deliver high quality, granular data. This is paramount to meaningful two-way data flow between broker and underwriter.

It’s a challenge that is being faced by everyone in the market as there are a plethora of different definitions, formats, etc. There is no standardisation in data conforming. Whilst Lloyd’s are working on implementing common standards, the technology that exists or is being created, can never be running at 100% and as strong as it could be.

3. Pricing

Pricing can be quick and simple, or time consuming and complex, depending on the risk. One consistency is there is always elements of to and fro to cover all the points, as it’s not a linear process. It becomes more like a conversation, and that’s where technology can be the downfall in the flow. It’s an area that we’re really interested in when developing technology platforms and solutions, because we believe that technology can streamline and speed things up, rather than hold them back – not matter of the complexities.

4. Promotion

We recognise the importance for brokers in getting the business placed quickly. New technology must bring significant benefits for distribution partners as well as carriers.

New technologies must address key issues in the marketplace, such as:

  • that brokers have numerous log-ons to various carriers’ portals. There’s a huge amount of work time wasted logging in and out, recovering forgotten passwords and simply just adapting to each portal’s nuances.
  • when good data is hidden in a slip or deep in an Excel spreadsheet, it comes down to the carrier to seek it out and extract, which slows the underwriting process down. Or, means that the policy is not underwritten as it should be.
  • when data is sparse and workflow informal, there are more errors, risks are poorly documented and worse contract certainty- which, in turn, means claims are less likely to be paid

5. People

Analysts now straddle two worlds, bringing a unique perspective, they understand the complexities of pricing and data with the added benefits of the right tools, diagnostics and workflow that technology affords.

High performing teams must both have the right mix of technical and soft skills. To deliver business value we embrace the agile principles of:

  • Individuals and interactions over processes and tools
  • Working software over comprehensive documentation
  • Customer collaboration over contract negotiation
  • Responding to change over following a plan

In the past there has been a healthy suspicion of technology in insurance. Yet, today it’s accepted that analytics, underwriting and technology are very much intertwined. Now the focus is on creating useful systems and platforms that are a seamless part of the process, and not a cumbersome add on.

Harnessing the power of technology and the science of analytics will stand the industry in good stead for the future, and we’ll see a new generation of actuaries who are shaping products, assessing potential markets, building transparent models and bringing new innovations to the insurance industry.”