The Chartered Insurance Institute’s Underwriting Faculty has published its latest ‘Underwriter of the Future’ report. Appearing six years after the first was published, the new version reviews the projections from 2012 at the halfway point of the journey to 2022.

On changing distribution in SME insurance, the report finds progress towards direct and online distribution for micro and small risks. For the larger SMEs, person-to-person relationships still predominate, but the economics of the traditional branch-based model continue to deteriorate.

The report also looks at changing customer demands. Customers will demand more price transparency, faster turnaround times and lower cost, it says, forcing insurers to significantly re-engineer their service proposition and operating model. Similar trends are also beginning to play out in other mature markets such as Germany and the USA, meaning insurers in these markets will soon also be facing tough choices.

Ongoing abundance of capital, it says, is continuing to put the traditional insurance industry under major cost and competitive pressure. The traditional broker-insurer-reinsurer value chain is fragmenting with innovative insurers showing willingness to separate capital provision from risk selection and underwriting, and some non-insurer players (brokers, MGAs, reinsurers) in effect starting to bypass traditional primary insurers to create their own new hybrid models.

Director of policy and public affairs at the Chartered Insurance Institute, Matthew Connell, said: “This excellent piece of research shows the different strategies open to insurers, and how this can affect demand for skills. It is a useful guide for people planning their training and development and provides invaluable market context for professionals shaping their careers. As a profession we need to be looking at the changes affecting our sector in order to continue being relevant to the needs of our consumers and clients.”

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