The insurance industry is at a pivotal moment. With unprecedented challenges like inflation, economic uncertainty, and the increasing impact of natural catastrophes, underwriters are finding that traditional methods need to evolve. During Kanopi’s recent virtual roundtable, experts from Zurich Insurance, Finity, and the Underwriting Agencies Council (UAC) shared valuable insights on how underwriters can navigate these turbulent times. Here are the five key takeaways from this enlightening discussion:
1. Expect the unprecedented
The current market landscape is unlike anything in recent history. Inflation, economic uncertainty, supply chain disruptions, and escalating natural catastrophes have created a perfect storm testing the resilience of traditional underwriting models. Matthew O’Sullivan, Chief Underwriting Officer at Zurich Insurance, emphasised the importance of preparing for “black swan” events—rare and unpredictable occurrences with potentially devastating impacts. O’Sullivan highlighted two critical realities for today’s underwriters: the unprecedented pace of global change and the necessity of preparing for these black swan events. He stressed that while the insurance industry has always faced challenges, the speed and interconnectedness of today’s global environment are creating unique pressures. Developments like geopolitical shifts or technological advancements can ripple across markets almost instantly, forcing underwriters to be more agile and proactive.
“We need to recognize that the pace of change is something we just have to get used to as an industry,”Matthew O’Sullivan, Chief of Underwriting – Zurich ANZ
Key takeaway: Underwriters must remain vigilant and adaptable, continuously updating their risk models to account for rapid global changes and prepare for unexpected, high-impact events that could disrupt the market.
2. Balance innovation with the human element of underwriting
As technology continues to reshape the insurance industry, underwriters increasingly rely on automation and AI to streamline processes and improve efficiency. According to a 2024 JAVLN report, underwriters currently spend up to 70% of their time on administrative tasks—time that could be better utilised for risk assessment and decision-making. Automating these traditional, time-consuming processes allows underwriters to focus on more complex, high-value cases. However, there is a critical need to balance technological innovation with the human expertise that remains essential in underwriting.
During the roundtable, Matthew warned against becoming overly dependent on data and algorithms. While technology can enhance efficiency by automating routine tasks and processing vast amounts of data, it cannot replace the nuanced judgment that experienced underwriters bring to the table. This human insight is crucial when dealing with unpredictable black swan events that fall outside AI-identified patterns.
Marcello Negro, Principal at Finity, agreed, emphasising that the best outcomes in underwriting come from a partnership between AI and human judgment.
“Technology should be seen as a tool to complement, not replace, the art of underwriting” –
Marcello Negro, Principal – Finity
Jenny Bax, CEO of Underwriting Agencies Council (UAC), reinforced this balance, stating, “The integration of technology should enhance the underwriter’s role, not diminish it.”
Key takeaway: As underwriters integrate new technologies into their workflows, they must strike a balance between the “science” of automation and data analysis and the “art” of human judgment. This equilibrium is crucial for navigating the complexities of modern underwriting while preserving the expertise and intuition central to effective risk management.
3. Data is the Underwriter’s New Best Friend
One of the roundtable’s central themes was the crucial role of data in modern underwriting. O’Sullivan noted that while underwriters are inundated with data, the challenge lies in structuring and filtering this information to focus on what truly matters. Without the right tools to manage this data, underwriters risk being overwhelmed and missing critical risks.
Marcello Negro echoed this sentiment, pointing out that data, particularly regarding climate risk, is not just abundant but complex. Understanding the impact of climate change requires an interdisciplinary approach, involving insights from actuaries, climate scientists, and economists. This complexity demands that underwriters leverage data from multiple sources to make informed decisions.
Jenny Bax added that agencies effectively harnessing real-time data, such as bushfire hotspots or flood patterns, can adapt quickly to changing conditions, giving them a competitive edge. “Integrating data from various sources into a centralised platform is essential for building comprehensive risk models,” she stressed.
Key takeaway: In today’s volatile environment, data isn’t just a tool—it’s the underwriter’s new best friend. Effective data management and utilisation can enhance risk assessment capabilities, focus on high-value tasks, and ultimately drive better portfolio outcomes.
4. Staying Updated with Compliance: A Non-Negotiable for Underwriters
In the fast-changing insurance landscape, staying updated with compliance is not just important—it’s essential. Regulatory compliance is deeply intertwined with effective underwriting, and strategic use of technology can streamline it.
Marcello Negro of Finity highlighted that while governance and compliance are core aspects of underwriting, they can also be tedious and prone to error. He shared an example of building an underwriting platform for a large insurer where compliance and governance were integral to the system. “We automated much of the compliance process, allowing underwriters to focus on the critical tasks that truly required human judgment,” Negro explained. This approach improved accuracy and freed underwriters to handle more complex decisions. O’Sullivan added that while automation can streamline compliance, the ultimate goal is serving the customer.
“Compliance isn’t just about ticking boxes; it’s about ensuring protections that genuinely serve the customer’s needs”
Matthew O’Sullivan, Zurich ANZ
Bax emphasized that the discipline around regulatory compliance has become more stringent across the industry. “We constantly need to be reacting, checking, and rectifying issues quickly to prevent compliance bombshells,” she noted.
Key takeaway: Compliance is critical, but with the right tools, it doesn’t have to be cumbersome. Automation helps, but underwriters must remain vigilant to meet regulatory demands while focusing on customer service.
5. AI and Emerging Tech: The Future of Underwriting, But with Caution
As AI and emerging technologies rapidly transform the insurance landscape, underwriters are keenly focused on how these tools can reshape their industry. During the roundtable, this topic was front and centre, reflecting the significant curiosity and concern among attendees about how to integrate these innovations without losing the human touch.
Marcello Negro of Finity provided a practical framework, the FOCUS method, to help underwriters decide which tasks should be automated and which should remain under human control. “Not every task is suited for automation,” he explained, stressing that some decisions, particularly those requiring nuanced judgment, should stay firmly in the hands of experienced underwriters.
This discussion struck a chord with the audience, many of whom are grappling with how to harness AI’s power without compromising the core principles of underwriting. The consensus was clear: while AI and technology are invaluable tools, they must be used wisely, complementing rather than replacing human judgment.
Key takeaway: While AI and technology are invaluable tools, they must be used wisely, complementing rather than replacing human judgment. Embrace AI’s efficiency and capabilities, but not at the expense of the critical human insight that drives sound underwriting decisions.
6. A New Mindset for Hiring Talent
The future of underwriting hinges not just on technology but on the people who will lead the industry forward. As the industry evolves, so must the skill sets and mindsets of its professionals.
Matthew O’Sullivan, Chief Underwriting Officer at Zurich Insurance, emphasised broadening the scope when hiring, moving beyond traditional backgrounds like commerce, actuarial mathematics, and engineering. “We should cast a broader net and seek out individuals with diverse experiences and open mindsets,” he said. He stressed the importance of adaptability, noting that while technical skills can be taught, it is much harder to “teach or upskill a mindset or culture.”
Jenny Bax, inaugural CEO of the UAC added that there’s been a noticeable uptick in young, tech-savvy individuals entering the industry, particularly through new startups and agencies. She highlighted the role of initiatives like the Rhodian Group, which provides the tools and support necessary for these newcomers to thrive. “They’ve got the skills, they’ve got the ability, they’ve got the innovation, the desire. And they just need that helping hand to get there,” Bax observed.
Marcello Negro from Finity echoed these sentiments, emphasizing that the key to attracting the next generation of underwriters lies in showcasing the exciting, impactful work available in the industry. “We need to do a slightly better job of storytelling,” he said, pointing out that the insurance industry offers opportunities to work with the latest technologies and make a real difference in people’s lives.
Key takeaway: The future of underwriting will be shaped by those willing to think differently and adapt to change. Underwriters with diverse backgrounds, open mindsets, and a willingness to embrace new challenges will drive innovation and success.
7. Collaboration: The Key to Future Success in Underwriting
In the rapidly evolving world of underwriting, collaboration is not just beneficial—it’s essential. The roundtable discussion underscored the importance of building strong partnerships across the insurance ecosystem, from technology providers to distribution partners and beyond.
Negro highlighted that a thriving digital ecosystem is built on interconnected pieces working in harmony. “It’s about striving for joint success and working together to solve problems,” he said, noting that the right tech architecture is crucial for enabling this ecosystem.
Matthew O’Sullivan from Zurich Insurance echoed these sentiments, stressing the importance of having a clear strategy behind every partnership. For Zurich, collaboration is about more than just expanding market share; it’s about developing technical capabilities and staying at the forefront of industry innovation. “If we’re not at that forefront, we’re already too far behind,” O’Sullivan warned, highlighting the necessity of continuous innovation.
Jenny Bax from UAC provided practical examples of how agencies that embrace collaboration and technology often outperform their peers. She pointed to the success of agencies like Blue Zebra and 360 Underwriting, which have leveraged their deep insurance knowledge and strong partnerships with tech providers to maintain a competitive edge. “They’ve partnered with a tech provider from the day of their inception, and they’ve been able to work together to grow their business from the ground up,” Bax explained.
Key takeaway: The future of underwriting belongs to those who can effectively collaborate across the value chain. Building strong partnerships, leveraging the right technology, and maintaining a shared focus on success are keys to staying ahead in this competitive landscape.
A Path Forward for Underwriters
Kanopi’s roundtable made it clear that the future of underwriting is about balance—between technology and human expertise, innovation and tradition, and immediate challenges and long-term goals. AI and automation offer immense potential to improve efficiency and accuracy, but they require careful management to ensure the human element remains central.
As the industry navigates economic and environmental uncertainties, underwriters must be prepared to adapt and evolve by embracing new technologies, fostering collaboration, upskilling talent, and maintaining a strong focus on the core principles of underwriting.
Watch the on-demand video of the full discussion here
About Kanopi
Kanopi is a trailblazing embedded insurance provider focused on helping insurers deliver smart, intuitive insurance. Kanopi’s platform enables insurers to build, manage, distribute and scale new and existing products quickly and easily to meet customers’ changing needs. We believe building a strong digital strategy is the first step to success in a highly competitive insurance landscape.
Take the first step to kickstart your digital transformation journey, download Kanopi’s FREE guide to building a future-focused insurance platform.
