IBM Predicts AI Will Revolutionize Insurance Underwriting

In a whitepaper called “Turbo-charged transformation: How cognitive underwriting is revolutionizing the insurance industry,” IBM lays out the case for artificial intelligence underwriting:

“Cognitive underwriting will transform insurance companies by augmenting underwriters’ skills to enhance their performance and improve corporate profitability,” the paper predicts. “Ultimately, this revolutionary new technique will enable these valuable professionals to work more productively, more quickly, and spend more time doing what it is they do best—risk assessment, market management, sales, and product innovation.”

The paper lays out the benefits that can be achieved through “cognitive underwriting” in which computer systems learn and apply knowledge:

• Improved underwriter productivity – Improved appetite clarity right-sizes the funnel resulting in increased underwriter productivity

• Additional insights – Appetite match provides additional insight for underwriting and pricing. Analytics on submissions informs appetite optimization and product development

• Improved channel relationships – Improved risk appetite clarity increases agent productivity in the submission process

• Increased underwriter retention – A more functional and user-friendly tool set helps new underwriters more quickly gain expertise and become more productive and satisfied with their work

• Faster scale-up of new hires – Expert-trained systems able to mentor underwriters at all levels, scaling expertise

• Use of single tool – Provide a one stop shop for all relevant information required in the underwriting life cycle process

• Reduced underwriting leakage – Faster and consistent underwriting process and decision making

• Improved conversion and retention – Provides underwriters with speed, accuracy, appetite and insight to better meet pricing and coverage considerations

“Cognitive underwriting will one day be the industry norm,” the report concludes. “Companies that enable their underwriters to offload a portion of their work to cognitive computing so they can manage the more personal needs of the business will ultimately lead the market.

“The technology is here, the need for more precise and consistent underwriting is clear, and the market is ready to be transformed.”

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