Got talent? AI gives underwriters an edge
Charles Murat Charles Murat
April 4 5 min

Got talent? AI gives underwriters an edge

Let’s face it, hiring and training reliable underwriters is getting harder every year. Commercial insurers are seeing experienced underwriters retiring fast and are experiencing high turnover rates with early-career underwriters. Gone is the idea of the lifelong employee that has underpinned the insurance industry for decades.

The challenge is not only to attract and retain underwriters, but to guarantee continuity of the unique culture of judgment that defines the insurer’s values for customers and employees alike.

Artificial intelligence will play an important role in making underwriting judgment more consistent, scalable, and accessible across levels of experience. AI can help insurers keep their unique underwriting expertise despite turnover, ensuring their competitive edge continues in the new reality of employment.

How AI helps underwriting talent

The complexity in commercial underwriting due to the significant variety in types of risk and various coverage needs required by customers can represent significant cost and pricing variations if underwriters are not able to close decisions quickly due to too much, or too little, information.

This is why a senior underwriter’s expertise is so invaluable: they’ve learned from experience how to make complex decisions efficiently and effectively, using intuition, rules of thumb, memories of past examples, and more. Seasoned underwriters know which sources to use and what red flags to look for in order to make accurate underwriting decisions quickly. As the volume of business grows, the value of accuracy with speed is critical to success but scale becomes a problem given the experience curve required to be fast and accurate..

As new employees enter the commercial underwriting workforce, transferring this expertise is a challenge. This is not only because the millennial workforce changes jobs more often than previous generations. Expertise is difficult to transfer because it’s difficult to write down. According to Polanyi's Paradox, “We know more than we can tell.”

AI can help because, unlike rule-based software that requires explicit programming for each decision-step, AI systems use past decisions to infer rules and learn tacit knowledge with training support from experienced underwriters. An AI model gradually learns from data from people’s previous decisions to make better, more useful predictions over time, what it’s learning is essentially the collective judgment of the underwriters whose decisions are saved as data.

AI models learn from past and make better predictions.

This ability to learn from past judgment becomes a talent edge by translating predictions into suggestions and recommendations for newer underwriters. Formats such as visual indicators of the key data points explain why an application is rated as high-risk. When AI systems learn, that knowledge can also be used to level-up other underwriters.

Insurers that succeed at using AI to make expert judgment more accessible to new underwriters—and easier to scale and refine for senior underwriters—will score a win for employees and customers alike.

The talent win for insurers : maintaining your culture of judgment

By capturing the tacit knowledge of existing underwriters, AI systems help amplify the unique culture of judgment at your company. This integrated system of judgment benefits senior underwriters by allowing them to spend more time focusing on work that requires their seasoned expertise the most. For junior underwriters, a system that helps reinforce and explain good judgment helps them learn their firm’s culture of judgement faster and shorten the time to doing more interesting work.

For example, if an AI system can be trained to segment risk for an application, and engineered to highlight key data points that explain this segmentation, then a junior underwriter can more quickly take on more difficult customer applications. More difficult applications make for more interesting and rewarding work, at the same time as honing underwriters’ skills more quickly than alternative approaches.

The talent win for customers: maintaining your culture of service

By helping to guarantee continuity in underwriting judgment, AI can also help underwriters deliver a stronger and more consistent client experience. By reinforcing good judgment, AI systems also reinforce expected service levels. They could also help underwriters personalize customer experience as systems learn the unique preferences of individual brokers, policyholders or the insured.

For example, an AI system could flag cases that need to be prioritized sooner, triage them, and assign them to the most appropriate underwriter based on multiple criteria. It could make these prioritization decisions using data about consumer preferences such as preferred methods or times of contact, or preferred working relationships with individual underwriters.

Empower your underwriters with AI today

In a world where workers as well as customers demand flexibility, AI has a special contribution to make for commercial underwriters. By making underwriting judgment more durable and scalable, AI systems help improve the talent experience for underwriters, at the same time as guaranteeing continuity of judgment and customer experience.

As the industry evolves, insurers that lock in these benefits early will quickly outpace competitors that don't. While every insurer needs to invest in protecting the expertise of experienced underwriters, only insurers that fundamentally improve their talent and customer experiences will attract new talent and customers.