Making underwriting more efficient is an area often overlooked by insurers. On average, they pay out 60–70% of premium revenue on the cost of claims and a further 20–25% on winning business through marketing and broker commissions. The premium balance funds operating costs (including underwriting expenses), provides profit for shareholders, and maintains critical access to capital.So why is underwriting efficiency not higher up on the transformation agenda? In my opinion, even though these efforts represent only a small percentage of total operating costs, there are big gains to make through better underwriting decisions that would then lower the cost of claims.
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