Underwriting has often been considered as the bedrock upon which insurance policies are built. Coupled with a rigid loss control strategy, these tenets make up the heartbeat of the insurance industry, shaping its trajectory and resilience in the face of evolving challenges. A host of insurance industry experts delved into the changing roles of underwriting and loss control and discussed the future of risk engineering.
Risk engineering encompasses a multifaceted approach to identifying, assessing, and mitigating risks within the insurance industry. It involves employing a combination of technical expertise, data analysis, and strategic planning to minimise the likelihood of losses and optimise insurance outcomes for both insurers and policyholders.
At its core, risk engineering aims to proactively manage and mitigate potential risks before they result in financial losses or disruptions.
This proactive approach involves a thorough assessment of various factors that could impact the insured property, such as location, construction materials, occupancy, and surrounding hazards.
By understanding these risk factors, insurers can tailor their underwriting criteria and loss control measures to effectively manage exposures and reduce the likelihood of claims.
Speaking in a webinar entitled ‘The Evolution of Risk Data’, hosted by Risk Control Tech, Karlyn Carnahan, Head North America Insurance at Celent gave her view on the current underwriting landscape in regard to risk management.
She said, “The reality is underwriting is becoming increasingly sophisticated, right, there’s a lot more data available, and people can use that for better forecasting for more thorough actuarial loss calculations. And so carriers are looking at how do we connect as much data as possible to leverage these enhanced insights, you know, to to have much better loss forecasting or to predict the behaviour of that account.”
However, this isn’t always so easy, as data isn’t always readily available. So how can you help mitigate the issue of having incomplete – or incorrect – data?
One such suggestion is that having an effective loss control strategy can bridge this gap. Ryan Allen, Sr. Loss Control Compliance & Audit Specialist at AF Group explained that a strong solution can allow you to more accurately assess whether or not a client would be at risk.
“Over the past two and a half to three years, we have significantly refined our approach [in regard to loss control]. We carefully analyse scores and prioritise aspects that are relevant to each account within their specific segments, facilitating their progress. Rather than simply assessing them as satisfactory and moving on, we now actively provide resources to policyholders in need. It’s remarkable to witness our advancements; for instance, we conduct virtual ergonomic assessments and utilise AI tools to deliver timely and tailored assistance. By monitoring developments nationwide and leveraging the data collected through the RCT system, we can offer support to policyholders, even if they haven’t been directly impacted.”
The technology has the potential to stand as a beacon of opportunity for both clients and insurers, offering a multifaceted approach to cost reduction and risk mitigation.
By proactively identifying and addressing potential hazards and vulnerabilities, loss control measures can help prevent costly incidents and claims before they occur.
For clients, this translates into tangible savings by minimising disruptions to operations, reducing insurance premiums, and mitigating financial losses associated with claims and liabilities.
Similarly, for insurers, effective loss control represents a strategic investment in risk management that yields long-term financial benefits.
By working closely with clients to implement tailored loss control measures, insurers can reduce their exposure to claims and liabilities, thereby preserving their profit margins and enhancing their financial stability.
