AI in underwriting will grow but not displace human experience

Evolving tech likely to augment human judgment in evaluating risks

By Benjamin Walker | Assistant Vice President – Cyber and Technology E&O Underwriting, Munich Re Specialty Insurance

One of the oldest and most-repeated sayings about insurance is, “It’s a people business.” With the advent and rapid development of artificial intelligence (“AI”), one might wonder if that saying will remain true. There are good reasons to believe insurance will always involve human intervention and human relationships – but AI and other technologies will play increasingly influential roles, particularly in underwriting.

Due to its ability to sort through large volumes of data, AI has the potential to support tasks such as assessment, analysis, and pricing of risk. These core functions of underwriting are repetitive actions that eat up a lot of time for insurance professionals. AI’s capability to alleviate that repetitive work could free up human underwriters to consider more complicated risks and to come to informed opinions more quickly and with increased accuracy. Let’s look a bit closer at what AI in underwriting might look like.

How AI can help underwriters

Less than 10 years ago, technology in many lines of insurance was still comparatively rudimentary. It was not uncommon for underwriters to manage their books of business using manually updated spreadsheets. Risk assessment in the era before data-driven underwriting required underwriters to parse through information without always seeing the whole picture, untying knots as they completed their research. Fortunately, in the years since, more sophisticated technology – including AI – has been implemented and put to good use. Underwriting processes and tools are much more robust and better integrated now.

AI today is being used to classify risks and sort through submissions according to North American Industry Classification System (NAICS) codes or Standard Industrial Classification (SIC) codes. This is time-saving and helpful. It also gives human underwriters a second set of “eyes” able to flag information that may not have been captured or correctly classified. Deciding to accept a risk with missing or incorrect data could result in an insurer significantly underpricing that risk or inadvertently taking on risks outside the company’s appetite.

In cyber risk underwriting, for example, AI is widely used to conduct scans of public-facing information technology infrastructure. With this data, AI tools generate risk scores according to vulnerabilities uncovered by the scans. All of this happens quickly, presenting digestible insights that inform underwriting decisions. AI can analyze loss data for different threat vectors, determine a median risk score, and let underwriters apply different pricing scales to accounts above or below a certain score.

Importance of human expertise

There is no question that AI applied properly may result in significant time savings for human underwriters. Hours saved enable humans to apply their expertise to other, more complex risk situations, and to develop new or enhanced coverage products. Eliminating redundancies and manual steps in underwriting will mean less administrative work, and faster quoting, binding, and issuance of policies. All of that will result in improved productivity.

Even though AI can be quite sophisticated, it’s important to remember that intelligence starts with human knowledge. AI tools are only as effective as the accuracy of their algorithms. Errors can occur anywhere humans work, and the same can be said of AI-driven automation. In addition, an expert underwriter understands the subtle differences in exposure that AI cannot. Therefore, it’s important to be cautiously progressive about implementing new technologies.

The combination of AI and human expertise offers the best resolution for risk challenges in cyber and technology E&O underwriting and other lines. An advantage that human underwriters have is the ability to talk with colleagues and help each other validate their perspectives on risk. An easily overlooked and important aspect is the value of personal touch in business relationships. As an example, responsiveness is important to policyholders and brokers. For these reasons, AI is unlikely to replace the human side of this people business and will serve as a valuable tool for the underwriter.

For more information on Munich Re Specialty Insurance, visit

Ben Walker Headshot.png

Benjamin Walker is Assistant Vice President – Cyber and Technology Errors and Omissions Underwriting at Munich Re Specialty Insurance. He has extensive experience with cyber and technology E&O risks. Before joining Munich Re Specialty Insurance, he was the team lead on cyber and tech E&O at Corvus Insurance, a managing general agent, and prior to that held an executive underwriting role at Beazley.

Munich Re Specialty Insurance (MRSI) is a description for the insurance business operations of affiliated companies in the Munich Re Group that share a common directive to offer and deliver specialty property and casualty insurance products and services in North America.

For more information on MRSI, including licensing, regulatory-required, and other information on the operating companies, please click here.

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