Underwriters, underwriting and risk – what does the future hold?

Is underwriting an art or a science? It's a question that gets to the heart of the ten-year insurance career Matthieu Caillat (pictured) spent at AXA – serving in senior leadership roles before being appointed CEO of AXL XL in 2018.

Indeed, it was industrial science that first caught his attention when he joined as a trainee modeling accident at AXA's marine business. It proved a good introduction to the market, he said, not least because his boss at the time was a former nuclear submarine captain – and he finished his training believing that insurance could be an interesting career option.

When he was appointed to the role of COO at AXA XL, Caillat said it was a very attractive proposition because he saw that there was, “a great opportunity to change the market based on technology and data”. At the time, that focused on big data, and recognizing how it could be used to complement the expertise and experience of underwriters. As AI advances, its uses in relation to IT, security, data analytics, procurement, service delivery, and change and change delivery capabilities have become clear.

Dealing with the complexity of today's risk environment

What is becoming increasingly clear, says Caillat, is that the complexity and connectivity of today's risk environment cannot be navigated without data and AI. Currently, the market is in the early stages of fully understanding how profoundly GenAI will transform the insurance industry but it is the market players who lay the foundations very quickly, who will be equipped for that journey.

Amidst so many discussions about GenAI, it is easy to lose sight and perspective of the people affected by the shifts, and Caillat emphasized his focus on creating open lines of discussion throughout his team realizing that is the only way to bring everyone to the meeting. the trip. Tech – and especially GenAI – is blurring the line between art and science, and that's especially clear when it comes to underwriting. “We have profoundly changed the way we work, we have created business and technical teams,” he said.

“We like to blur those lines, rather than having business people on one side and technical people on the other, because by working together they can solve business challenges, or create new business opportunities.”

Where is the insurance market going next?

Looking at the future of the insurance market, he highlighted that although a large part of the sector has invested in data and technology, its approach to using these funds remains fragmented. Overall, he believes there is still a lot of potential to unlock the value of data and how it can be made more equitable and efficient. The Blueprint II initiative for the London market was a big step forward but this transformational journey takes time.

“It will take a combination of market initiatives, which are very useful, and individual player action to move forward,” he said. “And it should be like that. Companies need to continue to invest appropriately in technology, data and GenAI. “

As for what the underwriter and claims manager of the future might look like, Caillat said the obvious is that they will be successful if they can successfully combine their expertise with powerful, data-driven tools. Those tools will arm them with more insights to help them think of creative solutions to address specific customer needs – and ensure that any decisions made are data-driven.

“When I started in insurance, one of the old debates was whether underwriting was an art or a science,” he said. “At that time we didn't talk much about application management but I think we have realized how important it is in application management now. The debate about whether it is art or science continues.

“We see that science is taking up more space but we still need creative people who have deep knowledge and are able to bring together all kinds of information, data and understanding to spread the solution. For me, the underwriter of the future – more than any time before – is the one who knows how to use the tools to get the right information about risk, financial structures, legal exposure, risk consulting etc. to raise the best buildings. “