Group CUO of Zurich on the evolution of underwriting

As a agency believer within the transformative energy of underwriting, Penny Seach (pictured), group chief underwriting officer at Zurich Insurance coverage, is completely satisfied to plant the flag that underwriting “is the guts and soul of an insurance coverage group”. There are few within the business fairly as properly positioned to make that declaration.

How the function of the underwriter has – and hasn’t – modified

Discussing the way forward for underwriting in a latest interview with Insurance coverage Enterprise, Seach explored how underwriting has – and hasn’t – modified in the midst of her profession thus far.

“What has modified is the fast-moving complexity of the world round us and what we do,” she mentioned. “Even from a yr in the past, there’s now extra complexity. So, from an underwriting perspective, how we’re occupied with threat, understanding and digesting it continues to evolve at a really speedy tempo.

“By way of underwriting as a profession, utilizing important considering expertise to make an evaluation, after which going by the method of underwriting and figuring out the precise capability and the precise phrases and circumstances for a threat has at all times been key. That, in essence, hasn’t modified however the complexity of the altering world with the speedy evolution of know-how provides an setting by which an underwriter can thrive.”

The affect of recent applied sciences on underwriting and underwriters

Seach highlighted how new and revolutionary applied sciences, together with generative AI (GenAI), are getting used to enhance the abilities underwriters carry to the desk and to create new velocity and scale of decision-making. When she thinks about what retains her up at night time, she mentioned, it’s that intersection of focus threat and focus publicity.

The insurance coverage market is going through quite a few complicated dangers and the rising connectivity of those dangers, alongside the speedy evolution of know-how, she mentioned.  From an underwriting perspective, it’s important to contemplate what that intersection would possibly appear like and begin to discover methods to leverage it for the good thing about insurance coverage companies and, importantly, the shoppers they serve.

“The opposite attention-grabbing bit is, historically, we’ve used historic knowledge to be predictive of what we expect future developments are going to be,” she mentioned. “Clearly, there’s nonetheless a spot for that however you could have an overlay of these adjustments as properly. Relying solely on historic knowledge, chances are you’ll go off the incorrect path; you could bear in mind how issues have modified, and the place they is perhaps headed subsequent.

“There may be extra uncertainty when contemplating forward-looking developments, however I feel that we are able to use know-how in a wiser approach to assist us, to not make choices for us. We use situations to know focus threat and what that would imply for us. We will and do use AI at tempo now to assist us mannequin what these situations could possibly be, and achieve new insights into them. Beforehand, you’d enter the issue in and get the modelled outcomes, whereas now, you may perceive the pathway of that considering.”

This understanding permits underwriters to assume extra creatively about threat, Seach mentioned, and to discover completely different situations which department away from the unique drawback. This is without doubt one of the key methods by which she is seeing first-hand how know-how permits underwriters to have interaction and work together extra thoughtfully with potential areas of systemic publicity or focus threat.

Balancing short-term and long-term threats and challenges

As any individual who has spent plenty of her profession concerned in legal responsibility underwriting – which is long-tail underwriting, Seach understands the fragile process of balancing real-time threats with long-term exposures.

“Each underwriter has their very own perspective, after all, however as legal responsibility underwriters, we at all times say we’ve acquired essentially the most attention-grabbing function,” she mentioned. “As a result of we take into consideration right now primarily based on what occurred yesterday and what it means for tomorrow… I feel bringing AI to that drawback assertion, lets you be extra considerate about what that intersection seems like.

“It’s simple to turn into overwhelmed while you’re considering by completely different threat situations. However utilizing AI to assist your considering might be empowering as a result of it helps you visualize potential dangers and easy methods to handle them in numerous methods.”

Understanding and harnessing the total potential of GenAI

The ability of GenAI, and LLMs, similar to ChatGPT, from an underwriter’s perspective is much less about the way you interact together with your knowledge, she mentioned, and extra about coaching your mind to ask the precise questions.

Seach famous that, from a Zurich perspective, the flexibility to entry and carry out superior analytics at tempo and at depth helps the underwriting course of quite than changing it. The purpose is to entry info and supply new insights to underwriters to allow them to interact with the info and ask the precise questions.

“This helps us to know our clients in a extra intimate approach and that, from our perspective, is what actually makes the distinction,” she mentioned. “In any case, insurance coverage is and can at all times be about relationships. It’s about belief, about credibility, and about how we work together with our clients.”