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Three Ways Property Underwriting Risk Assessment Has Changed in 2021

As 2021 comes to an end, CoreLogic is sharing thoughts on key industry trends in the personal lines property underwriting risk assessment and loss control space. The insights shared in this article are based on the unique vantage point gained from CoreLogic’s Underwriting Center platform and insurance carrier executive interviews. 

The COVID-19 pandemic proved to be a major catalyst for change within the insurance industry, and homeowner’s insurance underwriting risk assessment is no exception. Pandemic-related restrictions forced insurers to adopt the latest technologies to underwrite policies and better service their policyholder customers.  

Here are three ways underwriting risk assessment has changed within the main street personal lines property insurance line of business in 2021: 

  1. Insurers are upping the game on improving the customer experience

Over the last few years, consumers have started expecting the level of product delivery and service from their insurers that they are accustomed to from tech companies like Amazon, Netflix and Uber. Carriers were increasingly trying to meet these futuristic expectations, but the COVID-19 pandemic became the tipping point for insurers to deliver digital services to stay in business. Consumer expectations changed, and there was a surge in the carrier adoption of no-contact virtual and (DIY) self-service inspections.

Scheduling in-person, physical home inspections can be a hassle: scheduling conflicts, weather, distance and the intrusive nature of inspections can create problems for the homeowner, inspector and carrier. Virtual and DIY self-service inspections have eliminated much of this friction, cultivating positive customer/policyholder engagement. Insurers are also demanding faster turnaround on inspections, allowing for quicker underwriting decisions to meet policyholder expectations.

2. Insurers are increasing the use of DIY self-service and virtual inspection solutions

Insurance carriers’ quest for understanding the interior risk profile of a property at a 40% reduced cost structure and the desire to drive positive engagement with policyholders drove the DIY self-service adoption in 2020. The initial benefits gained in 2020, new thinking around increasing the volume of surveys to better understand the risk profile of the policies using a favorable cost structure, and the labor shortage of inspection specialists in 2021 drove carriers to further scale up their DIY self-service programs. 

Physical inspection volumes are projected to decline in the next two years. Some top carriers are considering moving to a self-service model or adding a self-service capability to their current inspection program. Hybrid DIY desk-inspections programs, where a policyholder is paired with a survey expert, are also gaining traction.

3. Increased demand for straight-through-processing enabled with AI

Insurers are optimizing their inspection programs by using no-touch straight-through-processing workflows and intelligent cascade of self-service, virtual inspections and physical inspection ordering logic to increase their return on investment (ROI). Carriers are moving away from home-grown legacy systems and point-solutions, to cloud-based SaaS platforms that offer business agility. The move to self-service inspections has created more demand for policyholder and agent digital portals to drive collaboration and agility in the underwriting process. 

The top carriers are leveraging outsourced insurance-to-value (ITV) and hazard review expert programs instead of assigning large internal teams to screen inspection results. There is an increased appetite among insurers to increase the volume of inspections and automate the detection of hazards and property attributes using AI-driven imagery and video extraction. 

Moreover, insurers are increasingly looking for a deeper information exchange between the claims and underwriting sides of their business. It is valuable for claims adjusters to have quick access to historical inspection reports at first notice of loss to learn more about the property and to capture any underwriting guideline violation during the on-site claim inspection and scoping visits. 

In Conclusion

Personal line property underwriting risk assessment has made many significant advances and the industry is shifting due to the pandemic. Insurers are focusing on improving the customer experience by taking advantage of the latest technologies available. DIY self-service and virtual solutions are starting to become the dominant form of inspections. Cascading the many modes of inspection, AI and an integrated digital underwriting and claims workflow are enabling unprecedented levels of optimization in underwriting risk assessment.

As the critical functions of the insurance economy are adapting to the new circumstances of the pandemic, CoreLogic has played a key role in enabling the shift toward digital enablement of surveys through the CoreLogic Underwriting Center Platform. Top self-service survey apps from Hover and Flyreel are pre-integrated with CoreLogic’s Underwriting Center workflow as part of our Digital Hub Alliance program to promote choice and flexibility for carriers. With Underwriting Center, carriers get instant-on access to a suite of latest insurtech innovations and straight-through-processing enablement capabilities. 

To learn more about how insurers can automate their underwriting risk review workflow and survey management, click here.

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