0
NA Commercial Insurance
Underwriting Survey
Survey Sample
• Quantitative survey among insurance and reinsurance underwriters in the US
and Canada.
• 559 individuals c...
Key finding #1
Insurance companies are currently
investing and planning to invest in
underwriting over the next 3 years.

...
Underwriting is a major area of investment for organizations in
the next 3 years
Where is your company currently investing...
Companies with more than $1billion in annual revenue are investing
more in data and analytics when compared to other organ...
Speed to market is an important factor driving investment in
underwriting capabilities
How important are the following fac...
However, 72% of respondents believe it takes their organization
6 months or more to launch a major new product
How long do...
Pricing and risk evaluation are priority areas of investment
In which underwriting areas is your company planning to inves...
Process automation, analytics and collaboration tools are the
primary areas being improved
Where will your company invest ...
Key Finding #2
Maintaining underwriting/pricing
discipline, and controlling operating costs
and are among the top issues f...
Pricing and operating expenses are major challenges impacting
the company’s ability to achieve their business objectives
W...
Underwriting pricing is a challenge to commercial lines carriers,
while operating costs are more of a challenge to reinsur...
Organizations are actively working towards reducing expenses,
especially through automation and integration with agencies/...
57% of organizations have automated 50% or less of their
underwriting processes
For the following premium segments, what p...
Key finding #3
The quality of underwriting tools has
improved and training has become even
more important.

Copyright © 20...
Underwriting processes and tools have improved, as have
training programs
How would you rate the current quality of the un...
Investment in technology and training are both crucial to
improving underwriting results
When considering how to improve t...
Underwriters and management generally agree on how to
improve underwriting quality
When considering how to improve the qua...
Key finding #4

Underwriting technology has improved
organizational performance, but
integration is a serious issue for mo...
One in two organizations are implementing, or will soon implement,
product development tools, collaboration tools and tele...
Most companies are implementing, or will soon implement, geo risk
concentration, underwriting support and exposure managem...
Only half of underwriters feel that the technology used within
their underwriting division is very effective
How effective...
Managers are more likely to think their current technologies are
more effective than front-line underwriters
How effective...
Insurers feel that their ability to drive profitability has been
improved through the use of underwriting technology
How h...
Most underwriters feel that technology has actually increased
their workload
Overall technology has…
2013

2008

...Increa...
Underwriters have seen their workload increase more than that
of management
Overall technology has…

...Increased workload...
Speciality Lines have seen the highest increase in workload
Overall technology has…

...Increased workload

51%

52%
62%

...
Data and process integration are the main causes of increased
workloads, along with insufficient training
Please rank from...
For more details on North America
Commercial Insurance Underwriting
Survey, visit:

insuranceblog.accenture.com

Copyright...
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Accenture Commercial Insurance Underwriting Survey

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New data sources, better analytic tools and more automated systems are giving commercial insurers expanded options for improving underwriting quality and productivity. As such, nearly 90 percent of carriers are currently investing in their underwriting function or plan to do so over the next three years.

How well are carriers doing in this area? Have investments empowered underwriters to do their jobs more efficiently and effectively now and in the future?

To answer such questions, Accenture polled more than 550 North American commercial lines, specialty lines and reinsurance underwriters on the major challenges they face today, the effectiveness of historical technology investments, and areas of focus for the future.

For Full Report, Visit: www.accenture.com/commercialUWsurvey

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Transcript of "Accenture Commercial Insurance Underwriting Survey"

  1. 1. NA Commercial Insurance Underwriting Survey
  2. 2. Survey Sample • Quantitative survey among insurance and reinsurance underwriters in the US and Canada. • 559 individuals completed the survey • Broad range of underwriting roles Job Title: Company’s 2012 Net Premiums Written (USD): Primary area of focus: 9% 10% 26% 28% 21% 23% 33% 24% 68% 29% 29% Underwriter Senior Underwriter Commercial lines Department/ Product manager Other underwriting executive Reinsurance Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. Specialty lines USD $100 – $500 million Less than USD $100 million USD $500 million – USD $1 billion USD $1 – Greater than USD $5 billion 2
  3. 3. Key finding #1 Insurance companies are currently investing and planning to invest in underwriting over the next 3 years. Copyright © 2013 Accenture All rights reserved. 3
  4. 4. Underwriting is a major area of investment for organizations in the next 3 years Where is your company currently investing or planning to invest over the next 3 years? 62% 60% 57% 57% Currently investing Planned in next 3 years 26% 29% 34% 33% 12% 11% 9% 10% Underwriting (incl. pricing) Product and policy administration Not a priority Data & analytics Distribution management (e.g. management of your sales and distribution channels including agents, brokers, Managing Agents, Alliances, etc.) Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 4
  5. 5. Companies with more than $1billion in annual revenue are investing more in data and analytics when compared to other organizations Where is your company currently investing or planning to invest over the next 3 years? Currently investing: Annual income 73% 69% 69% 64% 66% 57% 58% 60% 56% 60% 57% 60% Less than USD $100 million 52% 48% 47% 44% USD $100 – $500 million USD $500 million – USD $1 billion USD $1 – Greater than USD $5 billion Distribution management Underwriting (incl. pricing) Product and policy administration Data & analytics (e.g. management of your sales and distribution channels including agents, brokers, Managing Agents, Alliances, etc.) Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 5
  6. 6. Speed to market is an important factor driving investment in underwriting capabilities How important are the following factors in driving your company’s investment in underwriting capabilities? 58% 54% 52% 52% Very important Speed to market Cost reduction/ operating efficiency Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. Customer intimacy/ centricity Ease of doing business 6
  7. 7. However, 72% of respondents believe it takes their organization 6 months or more to launch a major new product How long does it take your organization to launch a major new product; from idea to roll-out? 1 month 5% 23% 3 months 32% 6 months 24% 12 months 18+ months 16% Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 7
  8. 8. Pricing and risk evaluation are priority areas of investment In which underwriting areas is your company planning to invest over the next 3 years? Select top 3 50% Pricing 47% Risk Evaluation 40% Process/Work Management 33% Document Management 33% Appetite/Eligibility Determination 28% Loss Control Inspections Book Mix Management 20% Exposure Concentration Management 17% Portfolio Underwriting None of the above 16% 5% Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 8
  9. 9. Process automation, analytics and collaboration tools are the primary areas being improved Where will your company invest in the next 3 years, to improve the effectiveness of its underwriting organization? Select all that apply 57% Increased use of process automation Increased use of Predictive Models for risk evaluation and pricing 51% Increased use of external data to evaluate risks 51% Improved collaboration tools for team underwriting and broker interaction 49% Centralization of its underwriting groups 33% Offshoring of some underwriting functions 14% None of the above 1% No investment planned 1% Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 9
  10. 10. Key Finding #2 Maintaining underwriting/pricing discipline, and controlling operating costs and are among the top issues facing underwriters. Copyright © 2013 Accenture All rights reserved. 10
  11. 11. Pricing and operating expenses are major challenges impacting the company’s ability to achieve their business objectives What are the main challenges within your underwriting function that impact your ability to achieve your business objectives? Maintaining underwriting and pricing discipline 72% 55% High operating costs/expenses Selected within top 3 choices Lack of quality underwriting information 47% Recruiting or retaining talent 43% Outdated/inflexible systems 43% Lack of management information and reports to analyze the business Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 33% 11
  12. 12. Underwriting pricing is a challenge to commercial lines carriers, while operating costs are more of a challenge to reinsurers What are the main challenges within your underwriting function that impact your ability to achieve your business objectives? Lines of insurance Selected within top 3 choices 76% Maintaining underwriting and pricing discipline 64% 63% 55% High operating costs/expenses 54% 61% 45% 51% 50% Lack of quality underwriting information 43% 45% 41% Recruiting or retaining talent Commercial lines Specialty lines Reinsurance 43% Outdated/inflexible systems Lack of management information and reports to analyze the business Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 42% 39% 30% 35% 43% 12
  13. 13. Organizations are actively working towards reducing expenses, especially through automation and integration with agencies/brokerages What activities are planned within your underwriting division to reduce underwriting and operational expense? Increased use of automation 17% 38% Increased integration with agencies/brokers 17% 38% 92% 37% 88% 33% Already Implemented Creating a core underwriting function 11% 29% 84% 44% Being Implemented Other changes to the operating model Outsourcing certain tasks Other Technology investments 18% 11% 17% Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 30% 31% 21% 80% 32% 31% 29% Planned in next 3 years 73% 67% 13
  14. 14. 57% of organizations have automated 50% or less of their underwriting processes For the following premium segments, what percentage of the underwriting process is automated? 19% 16% 14% 19% 19% 21% 14% 90% of more 23% 18% 21% 21% 20% At least 70% 38% 22% 20% 31% 23% 21% 19% 17% 23% 21% 20% 14% 8% Overall Up to $10000 premium 13% $1000050000 premium Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. At least 50% Below 50% 17% 18% 20% 19% 23% $50000 in premium+ Specialty 27% No Automation Reinsurance 14
  15. 15. Key finding #3 The quality of underwriting tools has improved and training has become even more important. Copyright © 2013 Accenture All rights reserved. 15
  16. 16. Underwriting processes and tools have improved, as have training programs How would you rate the current quality of the underwriting processes and tools within your underwriting division? 2013 Base size: All respondents (n=559) Underwriting strategy 4% 26% 70% 2008 Base size: All respondents (n=115) Underwriting strategy 6% 26% 67% 68% Frontline underwriting 7% practices 30% 63% Frontline underwriting 7% 25% practices Pricing strategy 31% 61% Pricing strategy 8% Accessible & intuitive tools & systems to 17% support underwriting 28% 55% Accessible & intuitive tools & systems to support underwriting 28% 25% Technical training programs 17% 31% 52% Technical training programs Non-technical training programs 18% 33% 49% Non-technical training programs Deficient (1,2) Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 12% Average (3) 32% 36% 52% 38% 39% 34% 34% 37% 34% Superior (4,5) 16
  17. 17. Investment in technology and training are both crucial to improving underwriting results When considering how to improve the quality of your organization’s underwriting, how would you rate the importance of each of the following areas? Top 2 boxes = Very Important + Important Investments in underwriting technology 45% 48% 93% Underwriter training 45% 48% 93% Market research 44% 48% 92% Risk selection 46% 45% 91% Very important 91% Important Risk pricing 42% 49% Risk appetite 47% 40% Predictive models 48% 38% 86% Aggregation of client and policy data for analytic purposes 51% 34% 85% Underwriter controls 46% Identification of fraud indicators 44% Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 37% 37% 87% 83% 81% 17
  18. 18. Underwriters and management generally agree on how to improve underwriting quality When considering how to improve the quality of your organization’s underwriting, how would you rate the importance of each of the following areas? Top 2 boxes = Very Important + Important Underwriting Management (Underwriter + Senior Underwriter) (Department/Product manager + Other Executive) Investments in underwriting technology 45% 47% 93% 45% 49% 93% Underwriter training 45% 49% 93% 46% 46% 92% Market research 45% 48% 92% 43% 50% 92% Risk selection 47% 45% 92% 44% 46% Risk pricing 43% 48% 92% 40% 50% 90% 90% Risk appetite 49% 39% 88% 45% 40% 85% Predictive models 51% 36% 87% 45% 39% 84% Aggregation of client and policy data for analytic purposes 50% 35% 86% Underwriter controls 47% Identification of fraud indicators 44% Important Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 36% 36% 82% 80% 52% 33% 85% 46% 38% 84% 45% 38% 83% Very important 18
  19. 19. Key finding #4 Underwriting technology has improved organizational performance, but integration is a serious issue for most companies. Copyright © 2013 Accenture All rights reserved. 19
  20. 20. One in two organizations are implementing, or will soon implement, product development tools, collaboration tools and telematics Within your underwriting division, what is the status of the following technologies? No Activity Product development tools Planned in next 3 years 21% 12% Collaboration tools and technologies Mobile (Wireless) technology for customers 21% 23% 15% 19% 13% 24% Mobile (Wireless) technology for agents 23% Web quoting facility for agents/brokers Policy administration Web Inquiry for agents/brokers Cross sell/lead management Agent/broker download Agent/broker upload 31% 27% 18% 17% 19% 17% 16% 12% 7% 14% 11% 14% 9% 13% Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 14% 35% 30% 27% 30% 26% 30% 27% 14% 31% 12% 10% Already Implemented 31% 34% 29% 35% 34% 31% 19% 21% Use of social networking or crowd 27% 19% Telematics Mobile (Wireless) technology for underwriters 31% 19% 20% Underwriting workstation 36% 21% 14% Geo-coding or mapping tools to manage exposures Automated underwriting decisions (no touch underwriting) Being Implemented 31% 22% 37% 22% 29% 35% 34% 46% 49% 48% 41% 48% 55% 20
  21. 21. Most companies are implementing, or will soon implement, geo risk concentration, underwriting support and exposure management tools What management information and analytic technologies is your organization currently implementing or planning to? No Activity Planned in next 3 years Management reporting 2% 10% Operational reporting 4% 11% Book/portfolio management 7% Being Implemented Already Implemented 34% 53% 26% 60% 17% 32% 44% 17% 31% 43% UW support 8% Pricing analysis and management 8% Exposure management 9% 16% 32% 42% Risk selection/tiering 8% 17% 32% 43% Submission routing 11% Cross selling 11% Geo risk concentration 12% Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 15% 14% 11% 18% 28% 29% 35% 32% 50% 46% 44% 38% 21
  22. 22. Only half of underwriters feel that the technology used within their underwriting division is very effective How effective are the current technologies within your underwriting division? Already Implemented Agent/broker upload Very effective Respondents 55% Policy administration 49% Web Inquiry for agents/brokers 48% Agent/broker download 65% 48% Web quoting facility for agents/brokers 46% Cross sell/lead management 41% Underwriting workstation 37% 49% 45% 50% 46% (n=276) (n=237) (n=229) (n=234) (n=228) (n=199) 40% 54% (n=184) Geo-coding or mapping tools to manage exposures 35% Mobile (Wireless) technology for underwriters 35% 52% (n=168) Collaboration tools and technologies 34% 52% (n=172) Use of social networking or crowd sourcing for risk information 34% Automated underwriting decisions 34% 48% 55% (n=162) (n=163) 50% (n=167) Product development tools 31% 51% (n=151) Mobile (Wireless) technology for agents 29% 50% (n=144) Mobile (Wireless) technology for customers 29% 49% (n=136) 49% (n=94) Telematics Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 22% 22
  23. 23. Managers are more likely to think their current technologies are more effective than front-line underwriters How effective are the current technologies within your underwriting division? Already Implemented Already Implemented Underwriting Management (Underwriter + Senior Underwriter) (Department/Product manager + Other Executive) 50% Agent/broker upload 48% Policy administration 50% Web Inquiry for agents/brokers 43% Agent/broker download 46% Web quoting facility for agents/brokers 42% Cross sell/lead management 35% Underwriting workstation Geo-coding or mapping tools to manage exposures 33% Mobile (Wireless) technology for underwriters 35% Collaboration tools and technologies 36% Use of social networking or crowd sourcing for risk information 34% 64% 61% 44% 50% 38% 45% 46% 53% 38% 46% 38% 54% 45% 54% 47% 54% 40% 66% 56% 55% 55% 56% 43% 40% 53% 39% 51% 35% 50% 33% 58% 33% 56% Automated underwriting decisions 31% 46% Product development tools 31% 45% 30% Mobile (Wireless) technology for agents 30% 47% 28% 54% Mobile (Wireless) technology for customers 30% 45% 27% 53% 44% 25% 53% Telematics 20% Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 37% 55% 59% 23
  24. 24. Insurers feel that their ability to drive profitability has been improved through the use of underwriting technology How has underwriting technology improved your underwriting performance? Increased your ability to drive account profitability 5% 23% 72% Automated simple tasks 10% 21% 69% Very much (4,5) Increased your ability to work with agents 10% 23% Increased your ability to work with raters and assistants 9% Increased your ability to cross-sell accounts 12% Increased your ability to obtain higher authority levels 12% 67% Average (3) Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 25% 25% 31% 66% Not at all (1,2) 63% 57% 24
  25. 25. Most underwriters feel that technology has actually increased their workload Overall technology has… 2013 2008 ...Increased workload ...No change 54% ...No change 36% Increase of 20 basis points since 2008 16% ...Decreased workload 30% ...Decreased workload ...Increased workload 34% 30% Base size: All respondents (n=559) Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. Base size: All respondents (n=115) 25
  26. 26. Underwriters have seen their workload increase more than that of management Overall technology has… ...Increased workload 56% 52% 15% ...No change ...Decreased workload Insurance Title 17% 27% Underwriting (Underwriter + Senior Underwriter) Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 33% Management (Department/Product manager + Other Executive 26
  27. 27. Speciality Lines have seen the highest increase in workload Overall technology has… ...Increased workload 51% 52% 62% 12% ...No change 17% 14% ...Decreased workload 37% 31% 24% Lines of insurance Commercial lines Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. Specialty lines Reinsurance 27
  28. 28. Data and process integration are the main causes of increased workloads, along with insufficient training Please rank from 1 – 5 the reasons why technology has increased your workload 2013 2008 Selected within top 3 choices Lack of Data Integration 81% Lack of Process Integration Insufficient Training Selected within top 3 choices 67% 56% Lack of Data Integration Lack of Process Integration Insufficient Training System Performance Issues 48% System Performance Issues System is not intuitive, not easy to use 48% System is not intuitive, not easy to use Base size: Respondents who indicated workload increased through technology (n=305) Source: NA Commercial Insurance Underwriting Survey Copyright © 2013 Accenture All rights reserved. 72% 81% 38% 53% 55% Base size: Respondents who indicated workload increased through technology (n=47) 28
  29. 29. For more details on North America Commercial Insurance Underwriting Survey, visit: insuranceblog.accenture.com Copyright © 2013 Accenture All rights reserved. 29
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