Our thoughts

Maybe this is a sign of how far rules engines have come. Historically an insurer’s underwriting philosophy was documented in an underwriting manual, provided by a reinsurer or produced by the company itself. Sometimes the reinsurer’s philosophy would be supplemented by variations drawn up by the insurer and stored on the underwriting intranet or on paper memos. Then underwriting engines came along and the job began of producing a rule set in the engine that reflected the underwriting philosophy. Obviously it’s not quite as simple as that because the roles of an engine and of a manual can be quite…

The process of life and disability underwriting varies from market to market. Those variations as they exist today have been driven by the prevalence of risk factors and the availability of reliable risk information, and not a little by history and culture (of consumers and of the industry itself) too. That differences in practice and process will persist is certain, as is that markets will develop at varying pace. But one cannot help but wonder whether underwriting is on the cusp of a real revolution. That revolution will be driven by ‘predictive modelling’, by which we mean the use of…