SMA Perspective for LT - Underwriting 03-13-15 FINAL

Modern Underwriting: Leveraging New Intelligence Capabilities
© 2015 SMA All Rights Reserved www.strategymeetsaction.com Page 1
An SMA Perspective
Modern Underwriting:
Leveraging New Intelligence Capabilities
Featuring as an example:
L&T Infotech AccuRUSI
An SMA Perspective
Author: Deb Smallwood, Partner
Published Date: February, 2015
This perspective is based on SMA’s
ongoing research on underwriting and
the modernization of legacy environments.
L&T Infotech has purchased distribution rights.

An SMA Perspective
Table of Contents
New Possibilities for Underwriting 3
Rethinking Underwriting Automation
Reward and Risk
Modern Underwriting Business Capabilities 4
The Modern Underwriting Workstation
Foundation of Information and Insight
Modern Underwriting Technology Capabilities 6
The Fundamentals
Finding the Right Approach
About L&T Infotech 7
L&T Infotech Company Overview
AccuRUSI Breadth and Functionality
Strategy Meets Action Commentary 10
About Strategy Meets Action 10
About This
Perspective
This SMA Perspective is
a summary of SMA’s
ongoing research on
underwriting and the
modernization of legacy
environments.
L&T Infotech has
purchased distribution
rights for summary
results of selected
research and opinion.
This is not paid-for
research.

An SMA Perspective
New Possibilities for Underwriting
Underwriting capabilities are instrumental in differentiation today. In fact, insurers are
just on the cusp of finding out how truly important they will be in shaping the future of
the industry. The bottom line is that to achieve success and compete effectively, modern
underwriting approaches and solutions are becoming an imperative.
When it comes to underwriting large complex risks, the “touch” of highly skilled and
experienced underwriters is still required to ensure the right mix of coverages and that
the price is properly formulated in order to financially protect the exposures and risks.
Historically – this “touch of art” has been a manual process, one that is highly dependent
on people and experience, with the blend of some automation. Today, with the
automation, tools, data sources, and analytics that are now available, there are new
possibilities for modernizing these traditional touch points with the next generation
workstation.
Rethinking Underwriting Automation
Currently, the implementation of modern policy administration systems has been the
primary solution avenue for modernizing the full underwriting process. Although these
investments have brought significant business benefit and value to the overall
underwriting process, they typically fall short when it comes to automating the desktop
of the underwriter for the management of complex risks. The gap is real and the impact
significant. SMA views the next generation underwriting workstation as the solution to
close this gap in capabilities. It becomes the vehicle for improving expense ratios and
underwriting productivity, using automation and the aggregation of information across
different applications via a single interface to enable a single view of risk.
So why is this the right time to rethink the underwriter’s desktop? Why now, especially
when it appears that the traditional approaches are presently providing adequate support?
And why now, when good financial results are evidenced by acceptable combined ratios
on the books of business? Part of the reason is that the world that surrounds and heavily
influences insurance is rapidly changing. And at the same time, there are changes taking
place inside the industry. But, the need to grow profitably with new risks continues. The
fact is, the more accurately an underwriter is able to assess and price (especially for new
risks), the better the outcome for both the risk and the portfolio. Competitors are not
standing still. SMA’s recent research, 2015 Strategic Initiatives: Making sense of the shifts,
shows the adoption rate is picking up, with 26% of commercial lines insurers investing in
underwriting solutions.
Reward and Risk
Thanks to maturing and emerging technologies as well as an abundance of valuable
information, there are indeed new ways to accomplish far-reaching underwriting
transformation. It is possible to make smarter, more informed decisions by using the new
types and sources of data that are currently available. New levels of sophistication in
information about risk and customer intelligence are possible. The ability to assemble,
massage, and interpret information is creating new opportunities to better assess the risks
Underwriting capabilities
are instrumental in
differentiation today. To
achieve success and
compete effectively,
modern underwriting
approaches and solu-
tions are becoming an
imperative.
Thanks to maturing and
emerging technologies
as well as an abundance
of information, there are
new ways to accomplish
far-reaching under-
writing transformation.

An SMA Perspective
and to gain new risk intelligence at the coverage and the portfolio level. There are new
ways to keep the methodologies and the tools used by the underwriter current.
While these new possibilities are profound, the risk associated with not rethinking the
underwriter’s desktop is equally profound. Those insurers that fall behind stand to lose
major ground in the competitive game. The impact will be experienced in many
dimensions. The laggards will likely lack the ability to respond quickly to changing
conditions and new opportunities. They will not have the ability to easily and quickly utilize
new sources of data, capitalize on social data, and implement new analytic tools. They
will find it difficult to scale with market and competitive shifts and nearly impossible to
adjust quickly to market and pricing changes in real time. It will become more and more
difficult to enforce shifting underwriting guidelines.
And the last, but very real risk: seasoned, experienced underwriters are reaching
retirement age, and that means a significant loss of underwriting knowledge and skill for
the organization. This loss can be difficult to manage because replacement experience
and skills are not readily available. Hence, there is another key reason for insurers to
deploy more modern underwriter desktops that fully capitalize on new sources of
intelligence and insight.
Modern Underwriting Business Capabilities
Modern capabilities for the underwriter and underwriting processes offer new levels of
efficiency and effectiveness. The possibilities are remarkable, enabling new levels of
competitive advantage and the ability to scale to meet changing conditions.
Transformation requires more than an enhancement of fundamental underwriting
capabilities. Insurers must think differently about tools and automation, viewing
capabilities with a new mindset and focusing on how to deliver a better value proposition
for the customer and the business. At the heart of underwriting transformation, sits the
next generation underwriting workstation. These powerful desktop solutions are able to
deliver next generation business capabilities by providing a more comprehensive view of
risk assessment and risk analysis combined with the insights to optimally manage the risk.
This advanced risk intelligence enables a single view of the customer, the risk, and the
portfolio – a single view that improves productivity, enables better underwriting decisions,
and enhances customer relationships.
The Modern Underwriting Workstation
A modern underwriting workstation builds on the foundation of the policy administration
platform, extending the value and power of modern policy system investments. Current
SMA research shows the support for many of the underwriter’s activities for complex risks
falls outside the policy administration system. A modern workstation provides support for
all these activities. It allows insurers to capitalize on an increasing amount of third-party
and social data and to use new tools and technologies that facilitate better processes,
better insights, better audit trails, and new approaches to the management of the
business. Historical information and insight on trends are readily available. Analytics are
applied in real time, delivering analysis that is more current and comprehensive. The
modern workstation creates a collaborative working mode with full visibility. It gives
Modern underwriting
business capabilities
offer new levels of
efficiency and
effectiveness. Powerful
next generation desktop
solutions deliver
advanced risk
intelligence – a single
view of the customer,
the risk, and the
portfolio that improves
productivity, enables
better underwriting
decisions, and enhances
customer relationships.

An SMA Perspective
insurers the ability to capitalize on mapping and geospatial location intelligence, predictive
analytics, and advanced models – creating an optimized and innovative underwriting
environment for complex risks.
Foundation of Information and Insight
The foundation for a next generation underwriting workstation is information and insight.
The workstation itself must be able to capitalize on that information and insight with
intuitive, intelligent, and interconnected competencies.
Intuitive
The intuitive capabilities of a modern underwriting workstation give underwriters just the
right additional information and insight, with an appropriate level of automation for each
risk and activity. Intuitive business competencies make it easier to understand what
particular data, information, processing support, and tools the underwriter needs to best
assess and address a particular risk at a particular point in time. Intuitive capabilities
provide an underwriter with guided flexibility to make real-time adjustments and fine tune
rules and pricing based on specialized knowledge of the risk, client, and portfolio.
Intelligent
The intelligence capabilities of a modern underwriting workstation can significantly
augment the expertise and experience of the underwriter by incorporating and taking
advantage of new sources of data and innovative models. The advanced functionality
enables underwriters to apply additional intelligence and consequently make better
decisions. At the same time, controlled discipline is applied, resulting in process and
pricing consistency, proper controls, override with reason, automatic referrals, and more.
Interconnected
The interconnection capabilities of a next generation underwriting workstation make it
possible to connect seamlessly with everything an underwriter needs. The workstation
performs as an integration hub, connecting the flow of any data (incoming and/or
outgoing) to any system – facilitating an easy and complete plug-and-play connection to
manual checklists, common and specialized data sources, policy and other core systems,
and more – all without rekeying or duplicating data. The integration extends easily to
automated workflow, document management systems, and various other processes,
systems, and tools.
Information and Insights
There is real business value in the information and insights that a modern underwriting
workstation is able to deliver. New types of data can be exploited, including third-party
data. Additional and more advanced analytics can be leveraged. A wide variety of new
models can be considered. More advanced levels of business management are possible
at both the risk and portfolio level. Powerful visualization, thanks to sophisticated mapping
and location intelligence, helps drive improved judgment and decision.

An SMA Perspective
Modern Underwriting Technology Capabilities
The technical requirements of a modern underwriting workstation expand beyond what a
modern policy administration solution (PAS) is designed to provide. The technology
requirements include a risk intelligence platform that allows easy integration with tools,
spreadsheets, models, and external data. This platform needs to support an environment
that integrates easily with internal systems and data sources and models as well as
external data sources. The platform makes it simple to capitalize on maturing and
emerging technologies such as those that deliver location intelligence and geospatial and
mapping insights.
The Fundamentals
The fundamental requirements for modern underwriting technology capabilities are
shown in Figure 1.
Figure 1. Modern Underwriting Technology Capabilities
The required technical capabilities of a modern or next generation underwriting
workstation include:
 Configurable workflows and rules engines – The workstation must use modern
configuration tools. By augmenting rules-based workflow management with analytics
and intelligence, the management of workflows can be much more dynamic. The
routing of work and the assignment of cases can be automatically orchestrated based
on accurate knowledge and system-generated wisdom from automated underwriting
guidelines and rules.
 Modern platform and real-time synchronization – The workstation must be
fully integrated with quote, policy, billing, claims, financial, social, and demographic
data as well as data from other public data sources and analytic models. Examples
include CAT models, flood and geospatial mapping, and emerging technologies.
Flexibility is of the utmost importance. This means leveraging SOA principles so that
Source: Strategy Meets Action 2015

An SMA Perspective
plug-and-play solutions can be integrated and deployed quickly and there can be an
easy exchange of data from a wide variety of sources. It must be possible to
dynamically integrate new and real-time data, as well as big data. For most insurers,
this ability to dynamically integrate new information and new models is a major
difference-maker – one that has the potential to significantly impact outcomes.
 Advanced business intelligence – dashboards, alerts, and analytics – The
modern workstation should give insurers the flexibility to integrate any and all data
sources, models, and analytics to provide advanced decision making and enhance
visibility in the area of risk assessment and pricing.
 Advanced user experience platform – The interaction between the underwriter
and the system is extremely important. The workstation must use modern user
experience technologies and responsive design principles – making it possible to work
on any device and any platform as well as connect to different back-end systems and
data sources. The workstation must have the power to deliver a user experience that
is practical, effective, meaningful, and valuable. Underwriters should perceive the
workstation as a welcome assistant, one that is easy to use and efficient in helping
them do their jobs.
Finding the Right Approach
Finding the right solution approach can be a complex undertaking. It is important to
consider the IT environment, the state of the policy administration systems being used,
and the level of risk analysis that is being conducted by the underwriter outside of the
policy administration system. For most insurers, given the complexity of needs and
environments, packaged software is not always the optimal solution.
Custom-built solutions for modern underwriting workstations can offer many advantages
and in many cases, provide a powerful approach to extending capabilities to meet distinct
business needs. Customized approaches allow insurers to tackle particular business
challenges and address specialized opportunities with a focus on the exact competencies
that meet the needs of their unique situations.
About L&T Infotech
L&T Infotech is a fully-owned subsidiary of Larsen & Toubro (L&T), a $14.5B engineering
and technology conglomerate that is one of India’s oldest and most respected companies.
Founded over 75 years ago by two Danish engineers, L&T has built a reputation as a
financially sound organization, possessing a strong engineering culture, driven by world-
class process and quality standards, and governed by a values-based management style.
L&T Infotech Company Overview
Headquartered in Mumbai, India, L&T Infotech operates through 14 delivery centers and
22 sales offices around the globe. With annual revenues of about $850M and over 18,000
employees globally, L&T Infotech is organized along industry verticals and has focused
its energies on providing premier technology services to its chosen market.
Finding the right solution
approach can be a
complex undertaking.
Custom-built solutions
for modern underwriting
workstations can offer
many advantages and in
many cases, provide a
powerful approach to
extending capabilities to
meet distinct business
needs.

An SMA Perspective
With over 3000 associates serving more than 20 leading insurance players globally, the
dedicated insurance business unit offers a wide range of IT solutions and services. This
unit is the fastest growing vertical within L&T, experiencing a CAGR of over 30% for the
last ten years, with over 90% repeat business.
AccuRUSI Breadth and Functionality
L&T Infotech offers AccuRUSI (Accurate Risk Underwriting through Systems Integration),
an underwriting workbench solution that creates a unified work environment for the
underwriter. This solution, comprised of customizable components and framework rather
than traditional package software, offers insurers business value in a variety of ways:
enhanced accuracy in risk selection and pricing; improved underwriting productivity and
responsiveness; and greater consistency and control over underwriting processes, risk
visualization, and accelerated development.
L&T Infotech’s goal is to transform the underwriting function by bringing rigor, efficiency,
and control to processes by leveraging advances in technology and data availability. The
solution provides a very strong integration platform and a single, unified workbench that
can review and record every detail related to the underwriting process. With AccuRUSI,
underwriters save time in gathering data and are able to focus more on analysis and
decision-making with the help of automated intelligent alerts and enforcement of controls.
AccuRUSI capabilities include:
Advanced Risk Analytics
 Comprehensive assessment of account and risk quality and quantification of risk
through scoring engines.
 Geocoding, hazard data, and mapping of perils.
 Risk accumulation management for multiple perils, regions, and lines of business.
 Case profiling and cloning, risk warnings, and streamlined processing for consistent
and informed underwriting decision making.
 Business and operational health check monitoring through performance dashboards.
Unified and Productive Work Environment
 Truly integrated platform for all underwriting processing needs and data analysis.
 Real-time underwriting enabled by effective task and workflow management with risk
alerts and notifications.
 Seamless extension of the policy administration environment and business processes.
 Collaboration between underwriters and also with other stakeholders.
 Automated case prioritization and assignment.
Delightful User Experience
 Tablet-friendly and underwriter-friendly screen design and navigation.
 Underwriting-centric functional design elements such as SANG (Status, Alert, Notes,
and Guidelines).
L&T Infotech’s goal for
the AccuRUSI under-
writing workbench
solution is to transform
the underwriting
function by bringing
rigor, efficiency, and
control to processes by
leveraging advances in
technology and data
availability.

An SMA Perspective
 Plug-ins for Microsoft Outlook, configurable rules engine, and workflow controls.
 ACORD-based integration adaptors with core systems.
AccuRUSI offers flexible and configurable components that jump-start a customized
development cycle for building an advanced underwriting solution. The solution provides
prebuilt business capabilities and a platform for technology components.

An SMA Perspective
Strategy Meets Action Commentary
The benefits of next generation underwriting workstations are quantifiable and real. The
cost of waiting is high. Now is the time when insurers should be viewing underwriting
capabilities with a fresh mindset. It is important to reimagine and rethink what a next
generation underwriting workstation is capable of delivering – to consider the total
business value proposition – driving competitive advantage and profitable growth.
When, where, and how to start? When? Now, if not yesterday. Where? First, understand
what is indeed possible with the offerings available today and look at what will be possible
in the not-too-distant future. Then, set priorities and use business terms to describe the
capabilities that go on the priority list. It is important to agree on what is most urgent.
That agreement is easier to reach when business professionals and IT professionals can
have a meaningful conversation. Next, understand and evaluate the solution options.
Determine the path that best fits the needs of your organization, and then just get started.
And, how to start? For some insurers, particularly those with strong strategic planning
organizations in place, it is simply a matter of shifting focus to the possibilities for
underwriting. For others, it might help to bring in expertise to articulate the possibilities
and connect their value to the unique characteristics and goals of your company. Helpful
guidance is available via research and advisory companies, such as SMA, and from service
providers that currently offer advanced solutions, such as L&T Infotech. The important
thing is to make progress – one way or another! Time is of the essence.
About Strategy Meets Action
Strategy Meets Action (SMA) is dedicated to helping the business of insurance modernize,
optimize, and innovate for competitive advantage. Exclusively serving the insurance
industry, SMA blends unbiased research findings with expertise and experience to deliver
business and technology insights, research, and advice to insurers and IT solution
providers. By leveraging best practices from both the management consulting and
research advisory disciplines, we take a unique approach – offering an unrivaled set of
services, including retainers, research, consulting, events, and innovation offerings.
This SMA Perspective is a summary of SMA’s ongoing research on underwriting and the
modernization of legacy environments. L&T Infotech has purchased distribution rights for
summary results of selected research and opinion.
Additional information on SMA can be found at www.strategymeetsaction.com.
Contact the author Deb Smallwood, SMA Founder at 603.770.9090 or
dsmallwood@strategymeetsaction.com.

SMA Perspective for LT - Underwriting 03-13-15 FINAL

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