Why the Decline in Underwriting Quality?

Insurance is a data-driven industry, and underwriting is its heart. It’s an uncomfortable fact, then, that data from the only longitudinal study of North American P&C underwriters reveals that many important parts of underwriting seem to be mired in decline.

It is no overstatement to describe the results of the most recent Accenture and The Institute’s underwriting survey as alarming. Underwriting may be in crisis.

In my previous post, we looked at the survey results from a high level. Today, we’re going to zoom in on the findings about underwriting quality specifically.

In 2008, 2013 and most recently 2021, we asked underwriters to rate the quality of the processes and tools they use to do their jobs. The scores for 2021 were the lowest we’ve seen -- though, interestingly, the decline has not been uniform.

For example, 62% of underwriters in 2021 told us they’d rate their organization’s underwriting strategy as superior -- down eight percentage points from 2013. Likewise, confidence that their organization employed a superior pricing strategy fell 11 points, from 61% in 2013 to 50% in 2021.