I read a brilliant book a few months back called the “The Second Machine Age” by Erik Brynjolfsson and Andrew McAfee. One of the most interesting things about it was a graph that plotted Human Social Development Index skyrocketing after the creation of the Steam Engine by James Watt. What was more intriguing was the fact that the skyrocketing effect occurred only after James Watt tinkered with the efficiency from 1% to 3% (it was hopeless at 1%). The authors go on to question (and answer) whether we are now in the Second Machine Age after the computer became TIME Person of the Year in 1982.
I experienced this right in front of my eyes on an Uber ride from JFK to Manhattan, where I saw three generations of Digital Navigation in front of me. My Uber driver was using a Navman, Google Maps and Waze and making decisions about how to expertly avoid NYC traffic. Other than the Uber driver being a voracious consumer of alerts and data, “what does this have to do with Commercial Insurance?” I hear you say. Well…a lot!
We have gone through wave after wave of Policy Admin replacements, with legacy systems replaced by PAS and achieved Underwriting 1.0.
Realizing in some cases we created a better “mouse trap”, some companies moved to the Underwriting Workstation to find the elusive Expense Savings, Automation and Collaboration in a siloed industry, gaining some modest success in reaching Underwriting 2.0.
Meanwhile, retail and consumer industries were moving to Big Data, Social Analytics and Machine Learning at a frightening rate. The gap between Commercial Insurance and other industries seemed to be widening and some would argue, becoming insurmountable. It was heading to meet the same fate as the old “book” Encyclopedias.
Commercial Insurance continued to:
- Look at narrow, structured and internal data sets (“I don’t have time to Google everything, show me the loss run and get this policy out!”)
- Think it is ok that data remained static and one-way where Underwriters (or Brokers) could not provide feedback to improve it (“The next guy will fix it up right? Actually the system doesn’t even let me update it!”)
- Spend 70% collating and 30% on high value work (“But I still got my policy out in 3 days, isn’t that good enough?”)
- Analyze data in a deductive fashion and miss red flags (“I checked the property, it was fine, how would I have known they hired illegal immigrants, that is impossible to find!”)
Why do we continue to operate this way? We do this primarily because the poor underwriter simply does not have the tools or the assistance to help them.It takes a revolutionary product to actually change these habits and achieve effectiveness and margin benefits.
Combining consumer technologies of Search, Aggregating, Machine Learning and Stunning Visualizations, Intellect SEEC has not just created Underwriting 3.0 but has created an underwriting assistant that will create Underwriter 3.0.Introducing the world’s first Virtual Underwriting Assistant – Intellect Risk Analyst.Welcome to the Second Machine Age and Underwriting 3.0!