AdvantageGo: AI is not going to take the place of the underwriter

Some commentators have suggested 2023 will be the year of the bionic underwriter – one who is able to leverage data, technology and human capital to underwrite as efficiently as possible.

According to AdvantageGo’s head of US, Martyn Sutton, AI and machine learning are likely to elevate to the point where modern technologies are “going to be part of everybody’s world”.

But he believes there is a misnomer within the (re)insurance industry that underwriting is close to becoming a fully automated function.

“If it does come, it’s a long way off,” he said in an interview with The Insurer TV.

“AI is not going to take the place of an underwriter. The person that will take the place of an underwriter is someone who embraces AI. Essentially, that’s how I feel about the bionic underwriter – it’s bringing together all of this capability, embracing technology where it's going to add value,” said Sutton.

This includes triaging and scoring data to align with appetite based on historical information using modern technology – however, ultimately, the process still delivers information that an underwriter must make a decision about.

“That’s the journey we’re on. Hopefully it will bring efficiency and take away a lot of repetitive tasks like rekeying data. But ultimately, it’s all about serving up the data and insight that allows an underwriter to make a decision much as they are today,” Sutton said.

“We’re in the age of digital,” explained Tony Russell, the company’s vice president of business development. “As vendors, we have a duty of care to actually help people realise that what we’re trying to do is not to replace them, but to help companies to grow with the same number of people rather than reducing headcount.”

Supply chain collaboration

During the interview, Russell explained that it is critical for vendors to take steps to collaborate with the rest of the supply chain in order to realise the potential digital experience in their end-to-end processes.

This collaboration can also enrich data ingestion, triage and dissemination to inform underwriting decision-making, he added.

Russell, who joined the commercial insurance software and solutions company last September, believes insurers that embrace technology ecosystems can better shape the broader insurance value chain.

“For the last two or three years, I’ve seen collaboration in the market, but the only part of the supply chain that hasn’t really collaborated is the vendors. We have a duty of care to change that,” Russell said.

“If we have a collaborative approach and put the plumbing in to help them actually realise real potential in all of their systems, then the ecosystem that we provide them starts to create some real value for these clients, and will help them accelerate their digital journey.”

AdvantageGo’s ecosystem is a network of strategic alliances with technology, data and analytics providers to offer a single-source technology proposition.

“The most important thing is that clients are in a position to deliver a modern, digital experience that excites their customers,” Sutton explained.

“It’s unrealistic to assume a single vendor can be all things to all companies. So the ecosystem allows us to bring together components that accelerate the value that customers are looking for.”

Data focus

The most significant challenge for (re)insurers embarking on a digital journey is understanding how to turn data into information that can be shared and consumed, Russell noted. Fragmented or inconsistent data will further affect decision-making processes.

“I've heard it said that data is the new oil. It’s key that we get data into the business, but then we have to turn it into information to be shared and consumed around the rest of the market,” he said

“That's something that we're not very good at – although we capture a lot of data in the day job, we’ve now got to turn it into something that we can use.”

Steps to improve data exchange and interpretability include the formation of standards bodies, such as Acord, and the development of a central data record in London – but Russell added this will take some time to “manifest into something useful”.

“The focus on insight at the point of sale is what everybody is focused on – whether that's using ingestion to extract data from documents, or integrating third-party data from modellers, exposure managers, pricing engines or peril suppliers,” Sutton added.

“It's bringing together all of that information in what is a little bit of an industry cliche – the single pane of glass – that gives the underwriter the information and the confidence that they're writing good risks at the point of sale. And if they're writing good risks at the point of sale, then obviously that's going to filter through to the result at the end of the day.”