4 reasons why Underwriting Agencies can be the leaders of product innovation.
The past twelve months has accelerated planned, and unplanned, change. History tells us that periods of hardship and confinement bring about considerable transformation, innovation and new ways of thinking. Many businesses have implemented changes that would normally have taken up to five years.
This is also true for the insurance space, as we contemplate new distribution channels, technologies and importantly, the need for product innovation. COVID has identified new risks that we haven’t encountered before, with a need for new products and changes in the way we identify and manage risk. In addition, low investment yields are distorting traditional risk destinations.
Underwriting Agencies can be leaders in these changes and are well equipped to drive the innovation that is required to push the insurance industry into new spaces and solutions.
Underwriting Agencies are in a unique position for 4 key reasons:
If you have ever spent time in an Underwriting Agency, you can feel the accumulated, specialist knowledge that exists for their particular risk categories. Staff often live and breadth the product, knowing and understanding the latest developments and claims stories. Some agencies have literally hundreds of years of accumulated experience on their payroll.
Having this specialist knowledge, at strategic and operational levels, for specific risk areas is something large insurers struggle to harness. By their very nature, the scale of larger insurers requires them to make decisions across much broader portfolios. This can put Underwriting Agencies in the driver’s seat when it comes to product and risk innovation.
Close to the Customer
Underwriting Agencies are generally lean organisations, with customers often having direct access to the business leader. This closeness to the customers keeps an Agency focused on providing the right solutions, at the right price, backed by often fanatical levels of customer service for their niches.
The need for new products and risk management tools has been clearly highlighted in recent times. There are so many blank spaces where cover simply doesn’t exist. Underwriting Agencies have, in many cases, identified these needs and are working up new policy wordings and underwriting capacity to accommodate and launch new products.
Nimble, Faster Decisions
Working in a large organisation generally means longer lead times in making key decisions about the business, its products and delivery. We have all dealt with large organisations that almost seem to go out of their way NOT to make a quick decision. Often a quick “no” is better than a slow “yes”.
The people running an Underwriting Agency are frequently the owners. This unique blend of management and ownership sharpens the senses and drives the need to make decisions faster and more often. Time is money in a small business, so Agencies recognise the need to focus their resources on more important things over convoluted processes.
Agile Technology Platforms
Underwriting Agencies need to be at the forefront of product and service design. They need technology platforms that are agile and ready to accommodate the latest innovation. Unlike large insurance technology platforms, that run up to 10 core products, Agencies often have dozens of products and combined have literally hundreds. Technology providers in the space need to be able to manage this complexity, whilst at the same time keeping development and operating costs low. Larger insurance companies are able to spend millions of dollars on expensive technology platforms. Underwriting Agencies simply can’t do that. They rely on agile service providers who can implement new products fast and with proven reliability.