Thought Leadership: Underwriting Excellence and the Path to Sustainable Growth
Thought Leadership: Underwriting Excellence and the Path to Sustainable Growth
Neelesh Parekh, Innovation & Growth Director Financial Services & Insurance, Zühlke, discusses ways to streamline and enhance the underwriting process.

In today’s dynamic insurance landscape, achieving underwriting excellence has evolved from a competitive advantage to a strategic necessity. As insurers navigate unprecedented challenges – from climate change to technology disruption – the ability to precisely select, price, and tailor risk has become fundamental to sustainable success.

The traditional view of underwriting as an isolated function has given way to a sophisticated, integrated approach. Today’s excellence in underwriting encompasses advanced analytics (data gap enrichment and gap fills for pricing), streamlined operations (AI agents for quote and bind for low-risk commercial policies), and behavioural economics insights (simplified medical questionnaires – or AI conversations for improved data accuracy). This transformation enables insurers to pursue multiple strategic objectives simultaneously, creating value across the entire insurance value chain.

Quantifiable Business Impact

The business case for a sophisticated, integrated approach, i.e., Underwriting Excellence, is compelling (data sourced from McKinsey):

  • Loss ratio improvements of 3-5 percentage points
  • New business premium growth of 10-15%
  • Retention increases of 5-10% in profitable segments
  • Straight-through processing rates reaching up to 95%

Reference: McKinsey Report on Data and Analytics

These metrics translate into substantial competitive advantages in today’s market conditions – particularly as the expense and loss ratios both come under the spotlight again for operational improvement.

“These capabilities improve loss ratios, boost retention, and enable insurers to write complex risks efficiently and effectively.”

Darren McCauley, Chief Underwriter for Flock Insurance

Darren McCauley, Chief Underwriter for Flock Insurance, said Flock enhances underwriting excellence by leveraging telemetry data to manage risk throughout the policy, optimise renewal pricing with real-time telemetry insights. “These capabilities improve loss ratios, boost retention, and enable insurers to write complex risks efficiently and effectively,” he confirmed.

Strategic Benefits Beyond the Bottom Line

Growth and Market Expansion

Advanced underwriting capabilities enable insurers to develop nuanced risk understanding, creating financially viable products for previously underserved markets. Examples might include individuals with pre-existing conditions, and high-risk property markets. This sophisticated approach allows for expansion while maintaining disciplined risk assessment. A particularly interesting area are small businesses with complex risk: last year, Zühlke issued a study titled “Small and micro enterprises: An underserved market”. The study unveils the central role of personal advice, but equally important of the perceived good coverage which is facilitated by advanced underwriting capabilities.

Operational Excellence

The integration of AI and advanced analytics and digital channels dramatically improves efficiency while enhancing accuracy. Automation of routine and manual interventions frees underwriters to focus on complex risks and strategic initiatives. Combining AI with Rapid Application Development and User Experience turbo-charges every underwriting workbench, since it ensures a high business impact and value-add of digitisation activities in underwriting.

Sustainable Risk Management

Data-driven underwriting provides insurers with empirical insights into risk factors and their correlations. This deeper understanding enables more sustainable risk-taking and portfolio management. Integrating underwriting tools into the existing data flow landscape transforms a good isolated solution into a great end-to-end underwriting workbench.

“The future of underwriting isn’t just about doing things faster — it’s about doing them smarter. It’s about giving underwriters the time, insights, and systems they need to focus on what truly matters: high-value risks, long-term growth, and better outcomes for everyone,”

Chris Spencer, Director of Solutions, Underwriting, Verisk SBS

Chris Spencer, Director of Solutions, Underwriting, Verisk SBS  believes the Underwriting experience should direct data, AI and integration efforts. He says: The underwriting world is at a turning point. Faced with mounting pressure to deliver faster decisions, improve accuracy, and optimise portfolios, underwriters are being asked to do more with less. However, many are held back by inefficiencies — time-consuming processes, inconsistent risk assessments, and a reliance on outdated systems that struggle to keep pace.”

Describing the impact of failing to embrace innovation, he says the results are: “Talent wasted on low-value tasks, delayed quotes that strain broker relationships, and missed opportunities to deliver true portfolio impact.”

He continues: “To thrive in today’s market, underwriting needs to evolve — shifting focus from routine to strategic, from reactive to proactive. This shift demands a data-first business model, where decisions are powered by real-time insights, automation eliminates bottlenecks, and consistency becomes the norm.”

Spencer also lists a number of questions that should be asked:

  • What if underwriters could spend less time on repetitive tasks and more time building broker trust?
  • How much stronger would portfolios be with better, more consistent decisions every day?
  • What would your business look like if underwriters had the tools to manage complexity and scale effortlessly?

“The future of underwriting isn’t just about doing things faster — it’s about doing them smarter. It’s about giving underwriters the time, insights, and systems they need to focus on what truly matters: high-value risks, long-term growth, and better outcomes for everyone,” he adds.

Broader Societal Impact

Healthcare Innovation and inequalities

Modern underwriting practices can incentivise positive health behaviours with programs rewarding fitness achievements that improve public health and create new market opportunities. 

Financial Inclusion

Sophisticated risk assessment enables coverage for previously uninsurable segments, contributing to broader financial security and social stability. An example of this is shown in how Zühlke defined (and demonstrated) a novel Bias Detection Framework for the FCA (see sidebar for details). 

Economic Resilience

Advanced underwriting capabilities help businesses and communities better prepare for emerging risks, from climate change to technological disruption. Whilst climate often takes top billing due to severe natural events, The CyberRisk protection gap (difference between insured losses and economic losses) is estimated at a staggering $0.9 trillion (link to report). 

Examples of investigating the societal impacts of biases were presented to the UK Financial Conduct Authority (FCA) in the Zühlke Bias Detection Framework. This allows teams to investigate the trade-off between useability and bias that is often: 

  • baked into models or collection methods
  • limiting access to treatments
  • misrepresenting experiences of diverse populations
  • inherent in both hardware and software 

* For more details on this, see the Zühlke FCA Bias Detection Framework video here.

Key Implementation Challenges

The outlined benefits do not come for free, but customers need to tackle technological, resource, and regulatory challenges.

Technology Infrastructure

Legacy systems often impede modern underwriting practices, creating integration challenges and limiting automation potential. Success requires strategic technology modernisation, this is often seen in manual data (re)entry, rigid data models and hard-coded business logic. Transitioning to more future-looking cloud and API enabled platforms that harness AI and advanced analytic models allows for larger data-set models – with deeper longitudinal forecasting and more accurate risk pricing.

Talent and Skills

The industry faces a widening expertise gap, particularly in digital and analytical capabilities. This challenge is compounded by demographic shifts and competition for talent. The ability of AI to bridge this talent-gap remains an optimistic goal, however given the rapid maturation of the technology this may become entirely feasible.

Particularly as AI starts to support and augment the existing talent pool, whilst ML-models and robotic process automation drive out the low-value and more deterministic tasks. Embedding powerful AI tools into workbenches with great User Experience allows insurers to win in the war for talents based on their digital assets.

Regulatory Environment

The rapid adoption of AI and advanced analytics raises important questions about ethics, privacy, and transparency. A proactive approach to compliance and governance is essential. This is particularly important with the growing impact of European and International regulation around the use and proliferation of AI.

The Path Forward: A Modern Data Approach

Modern data analytics and AI are revolutionising underwriting by streamlining processes and enhancing accuracy. Examples are halving client quote-to-issue times and accelerating policy binding using analytics. These advancements not only speed up underwriting but also improve risk assessment, leading to better decision-making and customer satisfaction.

Clearly AI (Generative and Machine Learning Models) have a significant role to play going forwards, particularly in driving early assessment and segmentation of inbound risk and auto-underwriting of accepted risk – this gradual uptake of AI to alleviate underwriter workloads is key to broader adoption.

By integrating advanced technologies, insurers can now process data faster, identify risks more accurately, and deliver policies quicker, all while reducing costs. Where firms have taken up this change we have seen them scale into new business lines more rapidly, deliver a better underwriting user experience and speed integration to new sources as they appear.

Taking Action: Next Steps for Executives

The journey to underwriting excellence is complex but achievable. Success requires a balanced approach that combines technology innovation, human expertise, and strategic vision. By taking decisive action now, insurers can position themselves for sustainable growth while making meaningful contributions to society. The following four pillars give guidance where to focus and how to balance the journey to underwriting excellence:

  1. Assessment and Strategy
  • Evaluate current underwriting capabilities against industry benchmarks
  • Speak to Underwriters to identify specific opportunities for improvement
  • Develop a clear roadmap with benefits realisation targets for transformation
  1. Technology and Data
  • Audit existing systems, data infrastructure and current / emerging cloud capabilities
  • Prioritise investments in critical and core capabilities, identify your most strategic platforms
  • Begin ‘Agile Pilots’ for AI and advanced analytics focused on user experience
  1. Talent and Organisation
  • Assess current skill gaps and future needs – business facing and technical
  • Develop comprehensive training programs and technology gap-fills (chatbots etc)
  • Create partnerships with technology providers and consultants
  1. Change Management
  • Establish clear governance structures and executive sponsorship
  • Define success metrics and monitoring frameworks with regular updates
  • Create communication plans for stakeholders

About the author: Neelesh Parekh is the Head of FSI Innovation and Growth for Zühlke Group. He helps Financial Services customers innovate to; increase revenue, reduce costs and manage risk in their businesses, providing services that span from award winning customer service design and delivery, through to cloud based innovation and build for AI, IoT and data strategies.

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