What is Smart Follow underwriting and how can it be harnessed by insurers?

Smart Follow marks a significant shift in the way underwriters work to make writing risks both faster and more accurate.

In this article, we’ll explore Smart Follow and how it is employed by Artificial's insurance partners to improve performance, offer enhanced value to clients, and manage risk reliably.

Smart Follow is just one of many technological advancements that are transforming the landscape of insurance, and insurers wanting to stay ahead of the curve should understand its importance.

How Smart Follow underwriting works

64% of businesses expect AI to increase productivity in the coming years; in insurance, at least, we’d argue that this number should be up to 100%.

Smart Follow is a form of algorithmic underwriting that automates certain aspects of the commercial and specialty underwriting process, improving efficiencies and saving valuable time in the process.

1. Firstly, underwriters choose to ‘follow’ a trusted Lead underwriter because they know that they share a similar risk profile based on several consideration factors.
2. Underwriters then configure specific rules and risk tolerances which are processed by Artificial's algorithm.
3. Once the Lead has negotiated and agreed the overall terms for the risk, data is captured by Artificial's AI-powered ingestion engine. Artificial's technology enriches submissions using third-party integrations to help enhance the decision making of the human underwriter.
4. The algorithm then uses this data to determine which risks should be written/followed, which should be referred to a 'human-in-the-loop' and which should be declined.

In this way, Smart Follow underwriting automates an underwriter's 'grunt work' or manual tasks, with only the most complex proposals being forwarded to human underwriters for further assessment - thereby increasing the proportion of the risk that is automatically processed before Follow underwriters even sit down at their desk.

But Smart Follow underwriting doesn’t just save time: it also offers underwriters a way to improve the service they offer to clients and manage risk at the same time.

How should underwriters make the most of Smart Follow technology?

It may be obvious that Smart Follow underwriting can reduce the time that underwriters spend on time-consuming manual tasks like data gathering and risk profiling.

But the key revelation of Smart Follow comes from knowing that the added value underwriters can offer their clients by switching to this method is potentially unprecedented.

Scaling up

Smart Follow underwriting offers many great benefits to the insurers who are quick to take it up. Insurers can use it to expand both the number of submissions they receive and the volume of quotes they’re able to provide - without overstretching their existing team of underwriters or investing in new hires.

This makes it one of the single most cost and time effective ways to expand and scale up an insurance portfolio.

Improving performance

It would be a mistake to think that the time savings offered by Smart Follow are counterbalanced by a compromise on quality.

Insurers can use it to improve their performance and profits by following some of the best underwriters in the Lloyd's and London markets, matching their premiums and sharing the same syndicated risks.

Artificial also allows underwriters to match risk to a target portfolio that can be tweaked and adjusted when necessary, giving a wider view of how Smart Follow products are improving their book of business and allowing teams to see where they could offer new opportunities to their clients.

The changing face of insurance underwriting

Smart Follow is changing the way insurance underwriting works on a fundamental level. At Artificial, it’s our view that this way of underwriting is set to become a market standard. We've partnered with companies like Apollo to implement Smart Follow across a number of business lines like Marine Hull, Aviation, Cargo and Terrorism.

The technology offers a multitude of benefits to brokers and both Follow and Lead underwriters, allowing each segment of the insurance industry to advance their own goals while delivering a superior service to their clients.

The nature of Smart Follow incentivises accurate pricing and reliable risk management without increasing costs to any party. Lead underwriters will work hard to maintain impressive performance records, and Follow underwriters will enhance their overall performance by working with the best in the London market.

Insurers keen to work at the cutting edge of underwriting should expect the Smart Follow market to expand rapidly over the coming years. As the market grows, Smart Follow syndicates are likely to become larger and more prolific, and insurers who are out of the loop will no doubt find themselves struggling to compete.

In an era that’s characterised by rapid technological innovation and unprecedented market volatility, the agility and responsiveness afforded by such technologies are more critical than ever.

Get in touch with Artificial

Smart Follow is just one of the advanced AI-powered tools that we offer to insurers and brokers. The adoption of Smart Follow underwriting not only enhances underwriting accuracy and efficiency but it also improves risk management and makes expansion and growth relatively easy.

If you want to know more about Smart Follow underwriting, and how you can use it to make more informed risk decisions, optimise pricing strategies, and mitigate potential losses, don’t hesitate to get in touch with us today.