How to close the gap between your target portfolio and frontline execution? We ask the experts
By Max Pepe, CMO, Cytora
Thomas Edison; still celebrated as America’s greatest inventor, once uttered the now famous words – “vision without execution is hallucination”.
Over the years, the essence of this simple yet profound utterance has become embedded into MBA teachings, woven into entrepreneurial philosophy, and celebrated as a pretty darn good business principle to live by.
We all declare, vision and strategy are imperative. But without execution, they’re merely an illusion. Few would disagree. So go forth and execute.
Let’s not forget however, that execution without vision, execution without strategy, is still a form of delusion. John Wooden, a wise and wildly successful basketball coach once said – “never confuse activity with results”. A rocking horse gives you something to do, but it doesn’t mean you’re going anywhere.
What’s the point? Vision, strategy and execution need to work together. Which is easier said than done, especially in commercial insurance.
You’ve probably heard a lot of talk about the gap that exists between underwriting strategy and frontline execution in recent months. Insurers are becoming more and more concerned about the disconnect between their target portfolio, and what’s actually happening on the underwriting frontline. Because most risks, still need to be processed manually.
So what do the experts have to say on the issue? We asked three insurance leaders to share their views, and outline where the opportunity lies for the future.
Kelly Lyles, former Chief Executive, Client and Country Management at AXA XL, told us that better data will give CUOs greater visibility on changes in execution:
“The gap between a CUO setting the strategy and implementation by underwriters is one of the most significant areas of vulnerability for insurers.
“Better use of technology will help ensure that underwriters use all available information in their decision making process. At the same time, it will give the CUO greater and faster visibility of strategic underwriting changes, and will enable them to see the impact on the portfolio in real time.”
For Adrian Brown, former COO at the Ardonagh Group, former UK CEO at RSA, it’s important to consider broker relationships:
“In defining any underwriting strategy, an insurer cannot forget the importance of broker relationships. Brokers need to understand the risk appetite of an insurance company, as they don’t want to waste time sending quotes to insurers who are not interested in that piece of business. Brokers also crave consistency and they don’t want a flip-flop approach to risk appetite.
“Of course, the frontline underwriter is the spearhead of broker communications. But you can’t take for granted that a change in underwriting strategy means a broker will give you all the risks you want and none of the ones you don’t. A broker trades on the broader relationship, which has to be taken into account when changing strategy and communicating to both the frontline and to brokers.”
Finally Thomas Huerlimann, Non-executive Director at Hiscox, former CEO of Zurich Global Corporate, told us that the constant evolution of the strategy is what makes it so challenging:
“Underwriting is a gigantic puzzle, where each puzzle piece – or each risk – needs to fit to achieve the optimal outcome. The problem is that whilst a puzzle is static, the underwriting strategy and targets need to be adjusted continuously to adapt to and capitalise on changes in the market. So a risk that was perfect yesterday in terms of price, terms and conditions and aggregation might not fit into the overall underwriting strategy today.
“To adapt quickly and continuously while ensuring underwriters focus time on strategy-aligned risks, insurers need to look at a digitised workflow and smart deal routing, which assesses the risk’s fit within the strategy as soon as it lands in an inbox. That way, insurers can effectively shape the book of business while winning time back to better understand and serve existing customers.”
There’s no doubt that it’s essential to connect underwriting strategy to frontline execution; and to keep up with the evolving digital world, a manual cascade of instructions, adhoc training sessions, and pure gut instinct are no longer enough.
Insurers need a way to digitise every risk. Whether an incoming submission, an upcoming renewal, or a reactive MTA, risks need to be machine readable. Not at document level, but at a level that understands risk. Only then can they be assessed, in real-time, in the context of an insurer’s defined portfolio goals – and routed to the right underwriter automatically, or, filtered out altogether.
Alongside a few insurance heavy-hitters, we’ll be discussing this very topic at an exclusive panel for Underwriting Innovation Europe on Tuesday June 29th at 1.30pm GMT. We’ll be zooming into the submission triage process, and talking about how digital risk processing could finally enable insurers to close the gap between underwriting strategy and frontline execution. Why not join the event, and ask a question or two live?
For more detail and to sign up, click here.