‘In the blink of an eye’- Lloyd’s CUO Rachel Turk on how AI can revolutionise underwriting assessments

Lloyd’s chief underwriting officer Rachel Turk has outlined the enormous power of artificial intelligence (AI) to revolutionise document assessment in underwriting.

Turk, speaking in the Voice of Insurance podcast on September 5, used the example of an underwriter on a property account.

The underwriter must typically upload the schedule of values, have them cleansed and then put it all through an aggregation model.

This all takes time, and then you might have 40 engineering reports to assess on top.

“There is no underwriter who is going to read all 40 engineering reports,” she said.

“What you can have AI do is read them all in a blink of an eye. And exception report at ‘there is something interesting going on here and here.’

“It could also look at T&Cs. How many times have we seen claims that have come out because a wording has shifted very slightly, and it wasn’t picked up by the underwriter?”

AI on vanilla risks and triage

Turk also outlined the power of AI to triage and tackle vanilla risk.

She said: “It can also allow just triage to be done in seconds or minutes, rather than hours and hours and hours.

“And therefore, your underwriting talent focuses on what they actually need to be looking at, rather than reading a load of engineering reports, of which there’s nothing to see.

“So, I think AI will hugely speed up the triage process.”

Turk also outlined the power of AI to help win business on plain risks.

She said: “Also, in this world that we live in, if it’s a relatively plain vanilla risk – fastest finger first wins the deal, right?

“So, the quicker that you as an underwriter, the quicker that you can respond to the broker with some terms and conditions that are pretty much going to get you the deal. Then you start to win.

“So, you’re able to sort of out price outperform, out compete. I think AI is going to be hugely valuable in that.”

Turk’s background and imposter syndrome

The podcast deep dived into Turk’s background and her journey into Lloyd’s.

Described in the podcast as a clear communicator with a down-to-earth personality, Turk joined insurance in 2009 after a stint as an equity analyst during the financial crisis.

She moved to Beazley in 2009 as a D&O underwriter and eventually headed up the US on the line.

Her big break came in 2015 when the role of corporate development came up.

But she almost lost the chance, due to what host Mark Geoghegan called ‘imposter syndrome’.

She explained: “And then, to my immense shame and opportunity, came up to be head of corporate development at Beazley, and I did the classically female thing of going, oh, that looks great.

“And I actually could probably do a lot of that, because, you know, it’s about some of the banking. I’ve done the M&A, I’ve done the equity analyst, but there’s somebody much more qualified than me, so I didn’t apply for it.

“Thankfully, the CEO suggested that was a mistake, and I did apply, and I got the job.”

She then moved to group head of strategy – before joining Lloyd’s in 2023.

Her current role is varied, focusing on profitability, underwriting, exposure management, reinsurance pricing, and claims.

She said Lloyd’s chair of markets, Patrick Tiernan, was focused on new entrants and oversights, while her role was ‘laser focused on the performance’.

Lloyd’s ‘reap the rewards of profitability’

Turk struck an upbeat tone on Lloyd’s and where the market currently stood.

She said rates were flattening and the focus was on maintaining profitability.

Turk explained: “We fought hard, as I said, to return to profitability.

“We took really hard medicine through the remediation phases, and I think we’re really well positioned for the next phase.

“There’s a lot of self-imposed discipline in the market right now, and there’s some discipline that perhaps we at Lloyds also will instil into the market.

“I think we’re probably getting close to a tipping point, though, where discipline needs to remain in order to continue to reap the rewards of profitability.”

Innovation

Turk stressed the need for the market to continue to innovate and this meant Lloyd’s fostering an environment where underwriters can take risks.

She believes there was a need for corporates to have business interruption and supply chain insurance, but market was ‘not really stepping into that’.

To create the right conditions for risk taking, she outlined how Lloyd’s would not penalise risk-taking.

For example, it could ring-fence potential losses in a business plan presented to Lloyd’s.

She said: “Now just to be clear, your capital providers may well be less willing to accept the losses. I’m not talking for the capital providers here.

“I’m talking for how we do it’s an oversight issue. So really, what we’re trying to do is encourage innovation.”

Turk also discussed with Geoghegan the reinsurance market and captives.