Flatlining: The future of underwriting
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Eight years ago, researchers from the University of Oxford analysed over 700 jobs to determine which will likely fall prey to computerisation.

The famous research found insurance jobs (which had a good representation of life insurers) in the US are highly at risk of becoming digitised - well ahead of cashiers, telephone operators and machinists.

The study by economist Carl Benedikt Frey and academic Michael Osborne determined insurance underwriting roles had a staggering 99% chance of being overtaken by artificial intelligence. Insurance claims and policy processing clerks (98%), and insurance sales workers (92%) are also at risk.

Data from Seek paints a bleak picture of the declining demand for underwriters. Job advertisements for underwriters tumbled starting roughly the same time as the release of the Oxford study, with the index peaking 120 points then plummeting about 95 points in 2020.

Contributing to the decline was the introduction of UnderwriteMe, a rules-based engine backed by global reinsurer Pacific Life Re in 2015, which has since become the dominant technology used by major players like Zurich, MLC Life, while boutiques such as NEOS Life and Integrity Life have recently jumped on board.

Meanwhile, Munich Re's proprietary technology ALLFINANZ is gaining momentum as TAL and ClearView put it to use.

Seek's data reinforces the accuracy of the Oxford prediction - but how much is attributable to the rise of automation given the life insurance sector is taking a hit on several fronts?

Adrian Karloci, a director at B&K Consulting specialising in recruitment in wealth management, life insurance and superannuation, does not see life insurance underwriters becoming extinct.

He believes traditional underwriting roles will continue to exist as changes the industry is undergoing tend to be more cyclical rather than structural.

"The underwriter's role will continue to evolve. The development of underwriting rules engines and technology in underwriting has provided an alternative career path in the space," he says.

"Some roles definitely have an automation aspect to them and technology will help add value."

The advantages of AI moving in for most or some portion of underwriting functions are well pronounced: the removal of mundane and laborious tasks paves the way for strategic high-level work.


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