Why Insurance Leaders Can't Afford to Delay AI Adoption

The Current State of Insurance Business Challenges

Your company may be facing the same issues many insurers encounter: a fragmented ecosystem of tools and systems that complicates the underwriting process. Surveying the market, we’ve found that insurers might have:

• 9+ different tools storing and pulling data
• 6+ analytical models used to assess and price risk
• A significant amount of time lost switching between disparate systems

Underwriters and senior leadership are often forced to make decisions based on incomplete or outdated information. This siloed approach not only hampers efficiency but also leads to missed opportunities and wasted efforts.

Consider this: Your underwriters are likely spending up to 40% of their time on "unwinnable" deals, manually sifting through submissions that could have been flagged early on as non-viable. This inefficiency is costing you more than time—it’s impacting your bottom line.

The Cost of Delays of AI Adoption for Insurers

In an industry where being first to market can make or break a deal, delays are detrimental. Currently, it can take more than 20 days for some insurers to generate a quote. By then, competitors with faster, more agile systems have already won the business. For companies like yours, this can mean a hit rate as much as 20% behind competitors. Your hit ratio may have dropped to 15%, and the consequences are clear—you're losing deals because your quotes are arriving too late.

On top of that, the technology debt many insurance companies carry is not scalable with projected business growth. Legacy systems are a bottleneck to innovation, preventing you from meeting portfolio goals and stifling profitability.

Federato Aligns to the Business Objectives You Can’t Afford to Ignore

The key goals for any insurer in today’s competitive environment are clear:

• Streamline core systems: Centralize data, integrate platforms, and give underwriters and portfolio managers access to real-time insights. 
• Quote faster and smarter: With tools like Federato, underwriters can quote and bind the right submissions quickly and effectively, improving the overall client experience, without having to increase headcount.
• Meet and exceed portfolio targets: By enabling data-driven decision-making, you can meet accumulation, risk, and profitability targets, aiming for a combined ratio of 99.5% (down from 101%).‍
• Reduce friction: From submission intake to bound policy, reduce the steps and time it takes to get the right coverage at the right time.

The goal is not just survival—it’s thriving in a marketplace where agility, speed, and accuracy are everything.

The Benefits of Adopting AI in Insurance Underwriting

Winning the right deals, faster: AI enables your team to focus on the deals with the highest likelihood of success, reducing the time spent on unprofitable prospects. This alone can drastically improve your hit ratio 11%. Turn winning into a science.

Improving profitability: Streamlining your systems and reducing manual processes translates to better efficiency and lower costs. A combined ratio of 99.5% is within reach if you leverage the right tools. Reduce systems and future proof your technology.

Reducing quote times: An AI-driven underwriting process can reduce your time-to-quote 89%, ensuring you're never the last to market. Operationalize your selection strategies.

Boosting staff retention and productivity: AI doesn’t just make your business more efficient; it also enhances employee satisfaction. With 15% faster onboarding times for new staff and fewer frustrations from manual, tedious tasks, your employees will be happier and more productive. Broaden your organization’s authority.

The True Cost of Waiting

Every day that goes by without the right tools in place is a day where inefficiency reigns. Your underwriters will continue to waste time on unwinnable deals, your hit rate will continue to lag, and opportunities will be lost to competitors who have embraced AI-driven solutions.

Waiting means perpetuating the technology debt that’s already stalling your business growth. It means maintaining a manual selection process that causes underwriting delays, driving away potential clients. Worst of all, it means continuing to operate with incomplete data, forcing your leadership to make decisions based on an incomplete view of your complex, multi-line business.

Take Action Now

The question isn’t whether you can afford to invest in AI RiskOps tools —the question is whether you can afford not to. AI is not a "nice to have" anymore; it’s a business imperative. The companies that embrace it will not only survive but lead the future of insurance.

‍Don’t let the cost of waiting hold you back. Your competitors are already moving. The time to act is now.

Federato’s RiskOps platform delivers a sleek, modern underwriting experience combining a unified workflow with real-time risk data and bleeding-edge AI to proactively balance a portfolio. To learn more, get a demo today or take an on-demand product tour.