One of the unique dynamics in insurance is that the company’s costs are unknown at the time policies are sold. The biggest cost for an insurance company is the cost of claims, which is only realized at a later date. As underwriters make decisions regarding risk selection, pricing and coverage, they are not just estimating, but helping to determine what these future costs will be.

Costs are also influenced by other factors: claims handling, the legal environment, loss control practices, etc. But claims costs—and the company’s ability to provide consistent capacity—are anchored in the business that the underwriters put on the books. Given the importance of underwriting decisions to an insurance company’s long term profit and sustainability, it is crucial that these decisions be made as optimally as possible.

Traditionally, decisions about risk selection, pricing and coverage were made individually by underwriters, based largely on personal experience. Experienced, well trained underwriters are critical to building a profitable portfolio. Particularly in larger commercial business, underwriters bring important technical expertise and can evaluate complex, nuanced risk features, partnering with producers to find solutions that are successful for the company and the customer.

At the same time, this individualistic approach to underwriting can open the process up to subjective influences. Underwriters vary in their personal experience and training. Some are more comfortable than others in assessing various types of risk. An individual may have experienced an atypical claim in the past that creates outsized bias against that type of business in the future. Underwriters may be influenced by leadership’s pressure for growth, price, profitability or other strategic priorities. And in traditional, legacy companies, it can be challenging for underwriters to make both objective and subjective considerations as the information needed can be difficult to access, dispersed in disconnected systems and contradictory in direction.

This results in different underwriters making different decisions, often regarding the same or similar accounts. And accumulating these inconsistent decisions creates a book of business that is prone to frequent re-evaluation, re-pricing and re-underwriting. This is not optimal for anyone: the underwriter, the carrier, the producer or the client.

At Blackboard, we recognize the delicate balance between respecting underwriters’ expertise and eliminating unsupported, subjective bias. Blackboard has created machine augmented technology to augment and empower underwriters’ decision making. There are some things that algorithms and machines do better than people: they see patterns that the human eye could never see, they apply rules and execute in consistent ways based on those patterns and they can provide guardrails to ensure that business is conducted consistent with internal objectives and within regulatory boundaries.

This enables and empowers our underwriters to do what people do best: to be creative, to hold our producers and ourselves accountable to one another, to build trust and to make decisions that provide valuable, sustainable solutions to both producers and clients. Blackboard’s data and analytics empower underwriters to move quickly, efficiently and with confidence.

With this approach, we treat data as an ally, not an adversary. This is true internally with our underwriting teams and it’s true externally with our producers. In the past, carriers have used data and proprietary algorithms in a way that can create tension between underwriters at carriers and producers representing their clients. In contrast, at Blackboard, we strive for transparency.

We believe that data and analytics should serve all participants of the insurance system. We believe that we are all stronger and more productive when we work off of the same information, and work off of it together. This method of using data to better inform the entire process spans all that we do, from underwriting and service to claims.

This approach to data and analytics also enables us to pivot from simply protecting underwriting results to driving growth. We use data and algorithms not just to underwrite business we receive from producers but also to score prospect accounts to share with producers. This changes the dynamics of underwriting in a profound way: from trying to screen out clients who don’t fit to instead trying to screen in—inclusively and proactively—those clients who fit best with Blackboard’s products and services.

Blackboard is unique not just in terms of the digital ecosystem that we have launched but in our desire to work together to create value for all of our stakeholders. We use data collaboratively, to supplement and support underwriter and producer efforts, reducing inefficiencies, saving time and providing a consistent, sustainable experience. And that is a win-win-win for everyone involved.