Rise of the Machines

Hank George, FALU, CLU, FLMI
Best's Review • November, 2009

Unlike “Terminator” movies, the machines in question here are the so-called “underwriting engines.” These “straight-through processors” have been around for years. Yet despite smashing success in the United Kingdom and other markets, they have languished in North America.

This appears to be on the cusp of changing now, due to the confluence of (at least) five key factors:

• Downsizing of underwriting staff driven by the economic downturn.
• Increasing focus on controlling operational costs.
• Allure of the long-neglected middle market, where traditional underwriting is innately incompatible.
• Opportunities with “super-simplified” issue products.
• Novel underwriting assets complement engines.