AI Will Enable Underwriters. Not Replace Them.

There has been a lot of articles written lately that AI is going to replace Insurance underwriters. I am here to say, it would not. And here are the reasons:

Complex Risk:

Businesses today are complex and multifunctional. The days of businesses having solo operations are no more. Companies are providing additional offerings to increase revenues. Let’s use an example of a bagel shop. Rather than just offering bagels, in which they can only sell until 1 pm; bagel stores are now offering additional services. For instance, in New York City, you will see bagel shop offering bagels in the morning and cooked food in the afternoon and nighttime. How would a computer classify this? It would not and that is why a human underwriter is needed. Another example, let’s take Uber and Postmates. Both businesses are complex with corporate offices, W-2 employees, independent contractors, premise deliveries, multiple services offering, commercial auto, etc. How can a computer account for all these factors and coverages needed? Again, it cannot. But with an underwriter assistance, it can.

Manipulation of Data:

Agents will do anything to get the sell. It is sad to say, but it is true. Let’s say the revenue or payroll impacts the premium. An agent who wants to win the deal from other brokers will comprise the numbers to win. However, if the application is then sent to an underwriter for review, he/she will do an investigation and uncover the comprises and requote it correctly. And AI only going off inputted information, it will not catch the comprises.

Human Assistance:

Human relationship is vital to the existence of insurance. Agents depend on underwriters for knowledge and directions. For instance, let’s say you are experiencing an issue with your car lease or cell phone contract, who would you rather speak with. A chatbox or certified human professional who can provide you insight and assistance? The same holds true for insurance agents and underwriters. Agents need to speak with underwriters in making sure risks are properly covered. Agents work with numerous insurance carriers with different underwriting guidelines. Underwriters help them understand these guidelines and place risk correctly.

Yes, I understand that AI can take care of the easy risk and underwriters do want AI to take care of it. But when it comes to complex risk. Human underwriters are still needed.

Furthermore, check out our free trial of Underwrite to see how AI assistance will enable you to write accurate policies.