Turbo-charged underwriting – You bet-cha!

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A few years ago, a couple of colleagues and I penned a white paper on Integrating the value of Data in Underwriting. It was slightly ahead of its time, but it underscored a central need for insurance within the burgeoning era of “big data.” It provoked the thought that this new era will excel when it can get the “right” information, in the hands of the “right” person (the underwriter), at the “right” time (contextually relevant).

There were some technological challenges to the propositions outlined, including how to digest all of this information and make it available to the underwriter. Since 70-80% of big data was identified as unstructured (text, video, audio) the task of capturing, analyzing, and storing that data for access and utility was challenging. Once stored, simplifying the retrieval of that data was yet another significant challenge.

Recently one of those colleagues shared a new white paper with me: Turbo-charged transformation. This paper independently builds upon our first one, but he and his associate significantly advance the conversation with the integration of cognitive computing.

The areas that his paper touches upon are some of the key C-suite issues in the industry today (e.g., talent drain, customer expectations, speed to market, use-based insurance, and a developing market for risk management services).

The breakthrough capabilities they identify are the ability to use cognitive computing to ingest huge volumes of data (80,000+ pages of text per second), understand the text with limited bias, remember the data taken in, and learn as new data is consumed.

Cognitive has the ability to transform the underwriting process because it can:

–        Ingest and understand large amounts of unstructured data (e.g., images, public data)

–        Increase accuracy and reduce bias formed from limited experiences or lack of data

–        Raise enterprise level expertise, as tribal knowledge is easily accessed and available

–        Increase speed of process with precision and consistency

–        Enable real-time portfolio shifts and ERM capability

We can all understand how robotics automates rule guided and repeatable functions. With cognitive, a carrier can now remove (from the underwriter’s desk) the need to climb through the tsunami of unstructured data, the need to reference underwriting policy and the constant avalanche of regulatory requirements. The underwriter can make fully informed risk decisions quickly (60-80% faster) and spend more time marketing a proposal’s features to the agent or buyer.

If you want to learn more about the value cognitive computing can deliver for insurers, read our recent white paper, Turbocharged transformation: How cognitive underwriting is revolutionizing the insurance industry.

Senior Managing Consultant - Insurance: S&T

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