Insurance leaders optimistic about AI’s impact on underwriting quality and fraud reduction but underwriter confidence lags - Seite 2

Underwriters’ confidence is key to reap trailblazer benefits
The report finds that 62% of executives recognize artificial intelligence/machine learning technology (AI/ML) is elevating underwriting quality and reducing fraud. Despite these benefits, only 43% of underwriters trust and regularly accept automated recommendations from decision-support predictive analytics tools. This hesitation stems from perceived overcomplexity (67%) and concerns over data integrity (59%). Insurers can overcome their reluctance, cites the report, by engaging underwriters early on to secure buy-in, retain the all-important “human in the loop” to ensure the AI/ML models are explainable and appropriately transparent, and continually assess progress.

While some carriers show promise in these areas, not many insurers successfully showcase the “trailblazer” ¹ qualities to deliver fast, unbiased, and forward-looking underwriting decisions. Armed with the right advanced underwriting capabilities, trailblazers can expect to reap benefits across efficiency (higher speed and lower expenses), accuracy (loss costs and fraud detection), and customer experience (new business and policyholder retention). The analysis finds that less than 13% of this group miss business goals associated with these priorities, compared to 21-36% of mainstream insurers.

Streamlined underwriting begins with unlocking deep data insights
A majority (83%) of P&C insurance executives believe predictive models are critical for underwriting’s future, yet only 27% say their firm has advanced capabilities. The journey to unlocking data-driven and actionable insights begins by leveraging a secure data ecosystem.

Globally, 53% of policyholders express concern about the amount of personal information collected by insurers. However, almost two-thirds say they would be willing to share more data in exchange for transparency, discounts, and reassurance that their information is secure. This sentiment represents a chance to scale up risk mitigation propositions and enhance insurability while building engagement and trust, leading to higher customer retention.

P&C insurers face a considerable challenge in meeting the data needs of their underwriters as there are significant gaps between the importance of various data types and insurers’ data capability maturity. According to the report, 49% of underwriters value drone image data yet very few insurers are equipped to support and analyze them effectively. Similarly, one-in-two underwriters want data from connected devices for real-time information about personal and commercial assets, although only 12% of insurers can capture such data effectively.