In this week’s The Voice of Insurance podcast guest, Sean McGovern, CEO UK & Lloyd’s market, AXA XL, covers a broad range of topics ranging from the “reset and relaunch” of AXA XL, how his organisation is empowering underwriters, innovation and modernisation in the London Market and our particular favourites, digitisation and algorithmic underwriting.
Sean also discusses his views on Lloyd’s Blueprint Two, and how being part of the AXA group provides a broader and more sophisticated view of the risk environment. The conversation also touches on why London is becoming more and more attractive for specialty and wholesale lines, the impact of Covid-19, climate leadership, and cyber risk.
We were particularly interested in hearing about Sean’s views on the insurance industry’s ongoing modernisation efforts. Sean pointed out that modernisation's challenges are primarily about delivery – taking the idea of change, making it tangible and getting the market to move collectively. Sean discussed that remote working has perhaps been the burning platform the market needed to accelerate its modernisation plans, and that cultural resistance to change has been a key inhibitor.
As the conversation turned to digitisation efforts and algorithmic underwriting, Sean shared his thoughts on digitising processes to make the end-to-end process efficient. The saying goes that technology is only as good as the user. The value add of the right underwriting tools is not limited to the processing of data and insights delivered, but in the fact that it liberates Underwriters from those low-value tasks so they can spend more time on improving customer engagement and relationships, and create new products to rapidly respond to shifting market needs.
We have always advocated that technology will never replace an Underwriter and that an Underwriter’s tacit knowledge is irreplaceable in the decision-making process. However, the industry needs to make room for innovation by incorporating tools that interpret structured and unstructured data in a meaningful way that enhances and supports an Underwriter’s decision to drive better risk selection and risk pricing. With a rise in the volume and format of data to analyse, underwriters need to quickly and accurately evaluate structured and unstructured data delivered through various channels, which underwriting tools can provide.
Data can only go so far. Data does not have intimate knowledge that an Underwriter possesses on a customer, it doesn’t have a record of client conversations and years of experience; as Sean succinctly puts it, “I don’t think we can be replaced by technology but no doubt there is a role for that kind of underwriting in the future.”
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