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

Breaking with centuries-old tradition – paper forms – is the uphill battle facing many insurance carriers embracing a digital-first mindset. While many have migrated to digital forms, submissions and claims processes, Michael Reilly, principal director of insurance at Accenture, is not convinced of a complete transformation. He said plainly: “We pretend to be digital today, but we’re not.”

“High-end commercial insurance today is really the same as it was 300 years ago when brokers would fill out these manual forms. The paper documents would be put in file folders and passed to an underwriter who would fill it out,” Reilly explained.

Reilly is one of the panelists at an upcoming webinar hosted by Insurance Business America entitled “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 in helping insurance carriers slash manual processes for underwriting and improve customer experience.

Reilly argued that the “digitization” of insurance has been fundamentally superficial. “What do we do today? We don’t hand over the paper forms. But we send those same paper forms in emails. We’ve gone from delivering them via mail, FedEx and fax machines, but we’re still handing over paper documents,” he illustrated.

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

Despite the acceleration of AI technologies, insurance carriers continue to hold on to paper-based manual processes. According to Reilly, this is partly due to the gaps in technology. Carriers have tried to upgrade their core systems by implementing applications that have only served as band-aid solutions.

“What we’ve seen is carriers have tried to do this piecemeal. They build a little solution here or a little solution there. Their workflow system becomes wrapped around these systems that solve tiny pieces of the problem, but often they’re creating more complexity as opposed to, you know, truly making a digital transformation,” Reilly explained.

The insurance industry is now on the cusp of breaking that 300-year-old cycle of paper-based processes and transforming into digital, thanks to AI. Underwriters benefit from AI’s ability to extract and organize data, delivering insights for them to consider.

“If we could fully digitize data and use AI [to analyze data], how dramatically different would that change the underwriting process?” asked Reilly. It’s a question that’s up for exploration during the webinar on October 12.

The transformative leap in the technology will come from big platforms with the analytics capability to manage significant volumes of digital data on top of the underwriting workflow and policy systems. However, the future of digital underwriting doesn’t mean companies will be replacing human underwriters any time soon.

“I think underwriters provide a huge value into the judgment for complex risks. Underwriters can bring information together and use it to make an informed decision,” Reilly said.

Underwriters are still a vital 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 provided a glimpse of this future.

Reilly said a lack of imagination and commitment might inhibit some companies from taking the leap. “Commercial insurance has been held back. I get 300 years of history is tough to give up. But the carriers that digitize underwriting end to end will have a tremendous advantage,” he concluded.

“It requires some new tools and new thinking. But the technology is there; the capabilities are there. We just need the willingness to apply it.”

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