Introduction

In an era where technology dictates the pace of business, Altus Consulting, a frontrunner in Financial Services Management Consultancy, has unveiled a compelling whitepaper titled *All Aboard for Modernisation: Next Stop Underwriting*. This document delves deep into the anticipated evolution of the insurance industry, spotlighting underwriting as a pivotal element of this modernization journey.

Challenges in the Insurance Sector

Despite a staggering investment of £15 billion over the past decade aimed at transforming the insurance landscape, companies still grapple with significant challenges. A recent survey referenced by Altus reveals a dismal statistic: merely 20% of firms have managed to achieve over 75% of their expected revenue gains from these transformation efforts. Adding to the frustration, only 17% of businesses realized more than 75% of their projected cost savings through digital transformation initiatives.

What’s more alarming is that this lack of success isn’t an isolated phenomenon within the insurance sector—data suggests that a staggering 70-80% of digital transformation projects across various industries fail to meet their objectives as well. This trend highlights a widespread struggle to deliver transformative change effectively, which Altus attributes to the scarcity of essential resources, a dedicated modernization team, and the requisite expertise to oversee change processes.

Focus on Modernisation

The whitepaper put forth by Altus emphasizes that addressing the challenges within the insurance sector starts with modernisation, particularly in underwriting. Mark Andrews, the Insurance Director at Altus Consulting, articulates, "Our whitepaper uncovers how advanced underwriting practices can confront future challenges, providing actionable insights into harnessing technology, refining core capabilities, and instituting new processes to boost operational efficiency and deliver bespoke risk solutions."

Overcoming Process Issues

However, the argument extends beyond merely implementing new technologies. Many transformation undertakings often stall because they overlook the critical nature of resolving underlying process issues. “Transformation has disappointed,” asserts Andrews, “because while technology updates specific systems or products, it disregards the broader business architecture. Outdated processes can hinder rather than facilitate modernisation, impeding the productivity gains expected from new tools.”

Incremental Transformation

Moreover, the report critiques the prevalent tendency among insurance firms to adopt disruptive “big bang” transformation methods. Instead, it advocates for a more measured, incremental approach that breaks down operations and enhances individual components—a method Altus believes constitutes the essence of true modernization.

The Importance of Underwriting Modernisation

The urgency for a comprehensive modernisation strategy becomes particularly clear in the underwriting function, which serves as the backbone for any insurance firm. It significantly influences how companies manage risk, oversee submissions, and mitigate inefficiencies tied to manual processes. Embracing modernisation in underwriting translates to sharper risk selection and pricing accuracy, all while alleviating the burdens of outdated operational methods.

The Growth Advantage of Modernisation

Altus draws attention to research indicating that enterprises focused on modernization and enhancing customer experiences realize 1.8 times greater earnings growth compared to their counterparts. As businesses scramble to leverage cutting-edge technologies like Generative AI, Andrews warns, "The urgency to adapt for modernisation is more critical than ever. While the technology showcases promising capabilities, the failure to embrace transformational thinking will prevent companies from reaping the rewards of their investments."

Conclusion: A Call for Thoughtful Modernisation

Ultimately, the integrity of an insurance provider’s operation hinges more on its ability to select risks effectively than on its expenditure or claims payout efficiency. Modernisation, which starts in underwriting, must permeate all aspects of the business to unlock the full potential of investments made.

The journey towards transformative change in the insurance domain must focus on sustainable and thoughtful modernization efforts, as underscored by Altus Consulting. Andrews concludes emphatically, “The insurance sector is ripe for modernization. However, due to its traditionally conservative nature, wholesale change often meets with resistance. A gradual, meticulous approach to modernisation presents the best opportunity for success. While substantial progress has been achieved in digitising insurance processes, the overarching task of modernization remains incomplete, and it’s imperative to deliver on the promises that initial transformation efforts have laid out.”

As the insurance industry stands at the brink of significant change, the call for modernization resonates louder than ever, positioning it as the beacon of hope amidst the challenges of an evolving landscape. Don’t miss the chance to be part of this revolution!