Abstract
For long enough insurance companies could sustain and prosper with a combined ratio of more than 100. This was possible because good returns on investment portfolios contributed generously towards a healthy bottom line. However today, with investment incomes dwindling, insurance companies are forced to revisit the way they conduct their operations. Adding to their woes is the changing economic environment with characteristics such as globalization, deregulation, demutualization, and consolidation. These and their ripple effects are having significant influence on how and what insurers should to do to ensure a profitable survival in the coming years. Insurance companies have to be profitable in their core activity of underwriting without an undue dependence on other sources of income like investments. Essentially the combined ratio, which comprises the loss ratio and the loss expenses adjustment ratio, needs to breach the 100 mark. Wipro has developed solution frameworks that would help insurers bring down the combined ratio by addressing its two components. These solutions are delivered leveraging the existing IT infrastructure, without demanding aggressive IT investments.

Underwriting transformation is the analytical solution for underwriting process improvement and is geared to help bring down the loss ratio. The other solution uses the activity based costing analysis to help bring down the loss expenses adjustment ratio. This white paper focuses on a comprehensive underwriting transformation solution framework which insurance companies can adopt.

Authors Subhobroto Ghosh Arup Ghosh

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