From paper-based to truly digital: how AI can transform the underwriting process

From Paper to True Digital: How AI Can Transform the Underwriting Process

Breaking with an age-old tradition – paper forms – is the uphill battle facing many insurers adopting a digital mindset. While many have migrated to digital forms, submissions and claims processes, Michael Reilly, senior director of insurance at Accenture, isn’t convinced of a full transformation. He said clearly, “We pretend to be digital today, but we’re not.”

“Premium commercial insurance today is very much the same as it was 300 years ago when brokers filled out those manual forms. Paper documents would be placed in folders and forwarded to an underwriter who would complete them,” Reilly explained.

Reilly is one of the panelists for an upcoming webinar hosted by Business Insurance America titled “How Artificial Intelligence (AI) is Transforming Insurance Underwriting”. The free virtual event features experts from Accenture and Amazon Web Services who will discuss the power of AI to help insurance companies reduce manual underwriting processes and improve customer experience.

Reilly argued that the “digitalization” of insurance has been fundamentally superficial. ” What are we doing today ? We do not deliver paper forms. But we send these same paper forms by e-mail. We have gone from delivering them by courier, FedEx and faxes, but we are still delivering paper documents,” he illustrated.

“When I started in insurance, companies had museums of paper documents. There were entire floors dedicated to filing cabinets. Today, these PDF documents are placed in electronic filing cabinets. We put it in SharePoint folders and sites and pass it to different people in our workflow systems, but we only extract a small amount of that data.

Despite the acceleration of artificial intelligence technologies, insurance companies continue to retain manual, paper-based processes. According to Reilly, this is partly due to technological shortcomings. Operators have tried to upgrade their core systems by implementing apps that have only served as band-aid solutions.

“What we’ve seen is that carriers have tried to do this piecemeal. They build a small solution here or a small solution there. Their workflow system wraps around these systems that solve tiny pieces of the problem, but often they create more complexity instead of, you know, truly performing digital transformation,” Reilly explained.

The insurance industry is now on the verge of breaking this 300-year-old cycle of paper-based processes and going digital, powered by AI. Underwriters benefit from AI’s ability to extract and organize data, providing them with insights to consider.

“If we could fully digitize data and use AI [to analyze data], how drastically would this change the underwriting process? Reilly asked. This is a question to explore during the webinar on October 12.

The transformative leap in technology will come from large platforms with the analytics capability to handle large volumes of digital data in addition to underwriting workflow and policing systems. However, the future of digital underwriting does not mean that companies will soon replace human underwriters.

“I think underwriters bring tremendous value in judging complex risks. Underwriters can gather information and use it to make an informed decision,” Reilly said.

Underwriters are still a critical part of the future of digital underwriting, but AI will prove to be “an unimaginable advantage” for insurance companies that seize the opportunities. Reilly pointed out that the digital transformation in the personal lines space has already given a glimpse of that future.

Reilly said a lack of imagination and commitment could prevent some companies from taking the plunge. “Trade insurance has been held back. I get 300 years of history is hard to give up. But carriers that digitize end-to-end underwriting will have a huge advantage,” he concluded.

“It requires new tools and a new way of thinking. But the technology is there; the capabilities are there. We just need the will to apply it.

Join us for a free webinar on how artificial intelligence is transforming insurance underwriting on October 12. The industry event will feature experts from Accenture and Amazon Web Services breaking down the biggest trends in AI. Click here to reserve your spot.

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