Here are some additional scenarios that I have seen quite often in my experience working with agencies in the past. Have you wondered why your underwriter asks for more information when you stated that the
insured is "retired" on an umbrella application? Have you ever been frustrated by carriers that have fairly liberal underwriting on some risk variable (brush or wind or coastal exposure for example) and then you complain a few years later when you have to "move" a large number of clients because they are no longer eligible for that carrier? Have you ever ordered coverage on a home for example and when the inspection came back with a Coverage A wildly different from what you quoted? In that case, when you were able to determine that the rating variable differences from what you quoted were based on faulty information from the inspector; did you have a difficult time understanding why the underwriter wouldn't just "fix it?"
If you answered "yes" to any of these questions, please read on. Bottom line, if you and your staff can master the following thought processes, your clients will be placed properly, you will save time in the long run, your client retention will improve and your agency will be more profitable- guaranteed!
How to develop an underwriting mindset:
- Retire the concept of - Give us XXX number of minutes and we'll save you XXX number of dollars. That's a "Quoter" mindset. You need to work on a risk until the risk is analyzed. That may mean a few minutes to multiple hours. When you thoroughly understand the risk characteristics of your prospect, you will then be prepared to place that risk with the carrier that has an appetite for those risk characteristics. You will not need to go back to the client multiple times with additional questions because you already understand the risk. Yes- this means you will occasionally have to deviate from the questionnaire that you use to get the information to be able to quote a risk. Quoting and underwriting is not the same thing. You will need to listen to the answers to the questions you are asking and think beyond what is being asked. Ask "open-ended" questions and let the prospect talk about themselves. The key here on the personal lines side is evaluating "lifestyle" and on the commercial side- the scope of the operation. Let me give you a perfect example of what I am talking about. The prospect calls to insure a retail photography shop. The agent writes it on a Business Owners Package (BOP). The insured has a million dollar GL loss. It was not until the loss that it became known that the insured rented out extremely large cranes to film studios to film movies. This type of exposure is certainly not contemplated by a BOP policy. This is a true story. Every client/ every business is unique. That's what keeps our jobs interesting and challenging.
Read more in part 3 of this series.
Sharon L. Graeter, CPCU is Co- Founder and Director of Development with West Connect Insurance Solutions. She has worked in the Insurance Industry on the carrier side for 30+ years and is a contract expert. Her insurance agency has created the infrastructure to help "Captive" agents
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