Underwriters uncover changing climate of skillsets

Authored by CII

Future underwriters must become skilled statisticians, engineers and technologically literate if insurance is to meet the needs of consumers and businesses, a report produced by the profession’s rising stars has concluded.

A report produced by the Chartered Insurance Institute’s 2021 Underwriting New Generation Group notes traditionally skills required of underwriters were analytical in nature.

As a result, sought after candidates mostly had STEM (science, technology, engineering and mathematics), business or economic degrees.

The group’s report, based on research that included a survey of Society of Underwriting Professionals members plus interviews with Chief Underwriting Officers and HR Directors, found to be successful as an underwriter in the future a more diverse set of digital analytical skills is required.

Given the challenges around recruiting suitable candidates that satisfy both the analytical and behavioural aspects, the group’s research uncovered a growing school of thought that advocates for the splitting of underwriting roles, differentiating between technical and trading or development roles.

The group claimed if the underwriting profession is to keep pace with the changing needs of consumers and businesses then insurers need to make targeted investments to enable the migration to a more future-forward technology stack now that can support a two-speed IT architecture alongside programmes focussed on talent acquisition and upskilling.

The report concludes to make the underwriting profession fit for future purpose:

New and existing underwriters should adapt and develop new skills alongside their core underwriting abilities to effectively collaborate with data specialists. These skills include the understanding and use of pricing models, data analytics, portfolio management and data manipulation.

Upskilling should be the preferred method when there is enough time to plan, train and execute.

External recruitment, specifically for skilled hires, should be considered effective in the short-term when time to execution is critical and the suitable candidate needs to hit the ground running.

The group warn the ramification of failing adapt quickly enough to this changing climate of skillsets is insurers are not only likely to lose their staff but also to see the impacts on their top and bottom line.

Chartered Insurance Institute’s 2021 Underwriting New Generation Group member Marcus Li, Senior Strategy Associate of Aon Inpoint, said: “Underwriters need to be empowered with the ability to interpret data they either were not able to or did not have access to previously. Up to 30% of underwriting roles could involve greater interaction with data scientists and the use of quantitative tools. Another 30% of roles could be automated, reducing manual and routine tasks to free up workforce capacity to attend to more value-adding business questions.

“Underwriters will not become programmers themselves, but they will work extensively with colleagues in newer digital and data-focused roles to develop and manage underwriting solutions.

“Underwriters have had to be agile and respond to the new working environment and technology. The requirement and demand for professional skills have not diminished, but rather augmented, becoming perhaps ever more important.”

Jonathan Clark, interim CEO of the Chartered Insurance Institute (pictured), said: “With the increase in use of data we are seeing a shift from underwriters being expected to detect and repair to consumers and businesses wanting the profession to help them predict and prevent risks.

“Clients and underwriters alike will reap the benefits of data-driven methods of monitoring exposure and mitigating losses, as well as using ever enriched claims data to drive better underwriting decisions that legacy rating methods would measure short against.

“The Chartered Insurance Institute is committed to helping insurance professionals develop the skills and knowledge they need to serve the public, which is why we have produced the Professional Map and worked with Southampton Data Science Academy to develop an introductory-level course on data science and artificial intelligence (AI) within the context of insurance.”

The Chartered Insurance Institute launched the Professional Map, a competency framework for insurance and personal finance professionals to progress their careers, in July.

The Professional Map enables professionals to self-assess their existing competencies, identify career future pathways, prepare development plans, plus find relevant learning solutions to fill skills gaps.

Employers will also be able to attract, develop and retain talent by using the Professional Map to develop standardised job specifications, design competency-based interviews and evaluation, plus prioritise organisational skills development plans.

For more details about the Introduction to Data Science and AI for insurance course visit: www.cii.co.uk/learning/qualifications/introduction-to-data-science-and-ai-for-insurance/