Home Insurance How To Think Like An Underwriter

How To Think Like An Underwriter

Have you ever thought what it takes for you or your staff to move from being an “Insurance Quoter” to a true “Insurance Professional?” I have worked on the carrier side of the business for 30+ years. I started as an underwriter and moved to sales, working with agents for most of that time. One thing that never changed is that once an underwriter- always an underwriter, and that thought process has served me very well over the years. I think the current general lack of training on the agency side is taking a huge toll on an agents’ ability to be successful.

An underwriters’ job is to analyze the variables that make up the risk factors of a potential client to see if the characteristics fit within the profile contemplated by the premium being charged and expertise of the carrier. In Personal Lines, rates are strictly regulated by the state, so carriers have to file rates based on what risk characteristics they want to insure. Rates cannot be deviated to fit the risk. This is different in Commercial Lines where the risk characteristics can be taken into account to determine the proper rate for the given risk. In either case, the individual variables that make up a given risk need to be known by the underwriter to be able to make an informed decision. By first analyzing the risk and anticipating what information the underwriter will need to make their decision; this is the first step to starting to think like an underwriter.

Before going any further down this path, maybe you’re asking yourself; why should I want to think like an underwriter? I am an agent. My job is to identify prospects and the Underwriters’ job is to determine if they qualify. Sure- that works if you’re an “Insurance Quoter!” Moving to the next level of being a true “Insurance Professional” takes a lot more effort, but the rewards are worth the extra effort. The reward is clients who value your opinion and expertise. The reward is having a reputation in the small world of insurance of being ethical and working in the best interests of all parties involved. These rewards are priceless if you are striving to build a business for the long-term.

I’m going to outline some pretty common scenarios I have seen over the years and how your agency can benefit by thinking more like an underwriter. Have you ever had an underwriter come back to you with an additional list of questions due to crossing a reinsurance threshold for example? Do you find yourself having to go back to the insured multiple times to get all of the information that your underwriter needs? Embarrassing isn’t it?

Please read on to part 2 of this article.

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