Empowering AIG’s next generation of underwriters
AIG’s Ken Riegler highlights balancing the art and science of underwriting.
Underwriters evaluating risks today are doing so during one of the most transformative times within the insurance industry – and the global risk environment.
Thanks to the growing sophistication of artificial intelligence and other technologies that generate real-time data, underwriters have access to more information than ever to deepen their understanding of the risks facing clients.
But technology and data, alone, won’t drive underwriting excellence – a firm tenet of AIG’s growth.
While assessing risk is becoming more of a science, it’s also still an art – meaning, the job of an underwriter requires a diverse set of human skills and perspectives to anticipate and manage risks that businesses and individuals face daily, says Ken Riegler, AIG’s President of North America Retail & Field Operations.
By balancing the art and science of underwriting, AIG is strongly positioned to address the changing needs of clients and customers in a way that also sustains its business long-term.
“We want underwriters with different thoughts, different backgrounds, different approaches on a particular risk,” Ken says. “The best way to do that – and the way I have done that in my career – is to surround myself with people and experts who think differently than me.”
Ken is passionate about developing AIG’s underwriting talent through mentorship and training and other programs. Part of his role includes leading initiatives to help underwriters hone their craft and grow into leadership roles across AIG.
“Insurance has offered so many people a great career,” says Ken, adding that his son, nephew and two nieces are all in the business. “It's not a job, it's a career.”
The science behind underwriting
As AIG develops its next generation of underwriters, their ability to draw insights from data will help shape policies and decisions.
Consider today’s construction sites as an example: Just a few years ago, underwriters relied on contracts to evaluate the scope of work and potential risks involved. Now, they draw information from data generated by water sensors, lifting sensors, and other control mechanisms.
While these developments help insureds mitigate risk and increase workplace safety, they also equip underwriters with timely data to evaluate risks in different ways, Ken says. More than that, insights drawn from data help underwriters understand risk better and therefore help clients solve and avoid problems altogether.
“I think data today has offered a unique opportunity for underwriters to be not only more efficient, but to be better portfolio underwriters.”
With more access to data, Ken adds, underwriters can deepen relationships with brokers and clients – many of whom are eager to know how insurers arrive at certain decisions, such as limits on coverage and premiums.
“The more underwriters can articulate that and be transparent, the better they’re able to build trust with those they work with.”
This doesn’t necessarily mean underwriters need to be data scientists or have a quantitative background. However, Ken adds, there are certain skills that help set them up for long-term career success.
This includes being inquisitive, analytical and an active listener. The best underwriters are also forward-looking, anticipating the shifting needs of risk managers, brokers, and ultimately clients and customers. They’re also collaborative – ready to work alongside actuaries, claims professionals, and other experts to help translate data into actionable decisions.
Balance science with the art of underwriting
Today’s risks are continually evolving, and it’s more important than ever for underwriters to stay attuned to changes around the world.
Case in point: As hybrid work becomes more commonplace, the lines between individuals’ work lives and home lives have continued to blur. Ken notes the shift could impact the dynamics between workers’ compensation and homeowners’ insurance. The same goes for auto insurance, as more households use their vehicles for both personal and business reasons.
Ken adds that underwriters will also need to consider other broad trends, such as losses related to jury verdicts. For example, jury awards for large trucks involved in crashes have risen rapidly: From 2010 to 2018, the size of verdict awards rose 51.7 percent annually, outpacing the growth of standard inflation at 1.7 percent during the same period, according to a 2020 report by the American Transportation Research Institute.
“If you're not always looking at your policy language today and refreshing it with things that you learn in the marketplace or things that you learn from the various losses that emerge, you're not doing a service to yourself, you’re not doing a service to the company and you’re not doing a service to the customer to address those risks.”
Ultimately, building a strong team of underwriters requires diverse perspectives. To expand its search for talent, AIG has partnered with several organizations, including the International Association of Black Actuaries and FourBlock, which supports U.S. veterans transitioning into careers. AIG also offers training opportunities, including its Professional Associates (PA) program, which aims to help kickstart the early careers of AIG’s underwriting talent by exposing them to different areas of the business as well as through trainings in technical and soft skills.
Many of the fundamentals of underwriting have remained the same. And with more access to more data and tools available, AIG’s underwriters are building on their diverse perspectives to help many more communities and industries evaluate and manage the risks ahead.