The value of algorithmic-based underwriting by Clyde Bernstein, Head of Broking, Willis Towers Watson Great Britain

In this week’s Voice of Insurance podcast, Mark Geoghegan chats with Clyde Bernstein, Head of Broking, Willis Towers Watson Great Britain, about the future of broking, how insurance brokers can add value in the age of algorithms, and why a new type of broker should emerge. Clyde also talks at length about the speed of digitisation affecting the insurance market, its impact on brokers and why now is the perfect environment for the industry to embrace change fully.

As discussed in this episode, the broking industry will have a future if it takes control of its destiny, and embracing technology and innovation is at the very heart of its transformation. Roles will evolve in the broking industry, and an insurance broker’s responsibility will shift into a more advisory capacity. Responding to Mark’s last question about any advice to the broking industry, Clyde responds with, “my advice to our business is that disruption and change is now just a standard thing we have to live with, and if we reject some of the changes that are coming through and we don’t embrace them, we will be pawn to those that are more interested in looking at this opportunity, this thing called insurance.” A crystal clear clarion call.

Gaining a competitive edge with algorithmic-based Underwriting

In this insightful podcast where Clyde speaks eloquently about the future of broking and his extraordinary vision for its digital future, it’s his thoughts on predictive analytics, digital underwriting and positive disruption through technology that captured our attention.

Mark and Clyde raised the argument on whether algorithmic-based underwriting has the ability to build a balanced portfolio or if only a human can achieve this, and to what extent it can help Underwriters understand whether they go left or right. As Clyde says, “in a world of ubiquitous algorithms, how do you get a different deal from that solution provider?”

We’ve published a blog on this very subject and how automation and intelligence-based assistance does not mean codifying an Underwriter’s tacit knowledge. There is also an excellent Voice of Insurance podcast where Jim Standard, Chairman of Ariel Re speaks about advanced algorithmic underwriting techniques and understanding which risks need an Underwriter and those can be mostly led by advanced analytics.

Embracing data correctly for better risk assessment and selection is a no-brainer, however, Clyde and Mark muse on the interesting point on how far analytics should go and the impact of cherry picking certain risks while side-lining others – a fascinating argument that looks at the other side of the coin of advanced algorithmic underwriting techniques.

The insurance industry is reinventing itself, without doubt. As Clyde points out, disruption in every other sector is predicted on the power of computing and technology, and especially so in the last ten months. But as Clyde rightly questions, who will be the trailblazers in the insurance industry when it comes to embracing change in the age of a pandemic? Perhaps 2021 will give us an answer.