#1:How To Think Like An Underwriter - Part 3

agents marketers - #1:How To Think Like An Underwriter - Part 3
Underwriting a prospective risk involves several thought processes that once mastered can lead to moving your expertise to becoming a true "Insurance Professional." In addition to what was discussed in the previous
article, consider the following when working with a carrier to place an account:

- Underwriters can only evaluate a prospective risk based on what information they have or are given. Do you deliberately leave out factors that might be viewed as unfavorable hoping that no one will find out? If so, that is a very short-sighted mentality and will lead to a relationship with your underwriter built on a lack of trust. Trust is the most critical element in determining whether an underwriter will make exceptions or compromises with an agency. Agencies that are better front line underwriters and honestly portray prospects "win" in every way. They win the respect of the underwriter; they maintain long-term relationships with carriers and their clients are properly insured.

- Once an underwriter receives written documentation on a risk, be it a CLUE report, MVR, loss run or inspection; they must act on that information until they have other reliable documentation to prove otherwise. Underwriters are regularly audited and have large losses routinely re-evaluated as to whether the risk should have been written. They are charged with documenting a file to justify a decision they have made. If you find you are getting a lot of risks denied, look no further than yourself for not providing the means to justify the decision being made.

- Underwriters tend (not always- of course) to be "analytical" personality types whereas agents (producers) tend to be more people oriented. Have you ever found it difficult to present a proposal and sell to an Engineer? Different personality types make decisions based on different criteria. Some like facts and figures and some prefer what's popular or liked by other people. You may need to think "outside of your box" to bridge your way of thinking and the information you need to make a decision versus what information an underwriter will need to make a decision.

- Agencies with large profitable books of business that have been doing business with a carrier for years are going to get more access to an underwriters time and effort in order to be able to present a risk (ie: commercial) and more consideration for exceptions than agencies that are small and newer. It's a fact of life. Get over it! This is one of the reasons "Aggregators" and "Clusters" have been so popular with agencies in the past few years. Be respectful, knowledgeable about your client and knowledgeable of the carriers' appetite for that type of risk (Don't waste your underwriters time!) These factors will go a long way to developing the rapport you want to create with your underwriter much more quickly.

- Carriers have short memories. When they are profitable, underwriting loosens to try to write more business. It's called "underwriting cycles." That doesn't mean your agency cannot set its' own criteria of risk you will allow to be written by your staff. Stop blaming carriers for your lack of underwriting standards.

All of the technology in the world has still not replaced the personal interactions that are still so critical to an account being properly analyzed and placed. It's in your best interest to start thinking like an underwriter no matter what your job is in insurance.

Sharon L. Graeter, CPCU is Co- Founder and Director of Development with West Connect Insurance Solutions. She has worked on the carrier side for 30+ years and is a contract expert. Her insurance agency has created the infrastructure for local "Captive" agents to transition to the "Independent