programs Underwriting

Underwriters play a critical role in the insurance industry. After all, they’re the ones who assess potential risks, calculate appropriate premiums, and determine policy terms. At the same time, they’re balancing the needs of policyholders with the needs of the business.

“Professional underwriters really are the backbone of our agency,” says Scott McDougall, who is President at Energy, Industrial & Utilities, LLC (EIURS), a DUAL North America, Inc. company. “We rely on their expertise to help create a balanced and profitable book of business for us and our partners.”

Different ways to support the business

Underwriters can be used to serve various purposes within a general agency. First, they can handle straightforward submissions by entering data into a rater and requesting a simple quote. 

“In my opinion, this is a ‘box underwriter,’ or one who works within a tight box with strict authorities around what fits and what does not fit,” notes McDougall. “This is a straightforward process that is very safe.” 

Underwriters can also be given more leeway as they operate under general guidelines and authorities—as long as they are able to justify the rationale for their decisions.

“This is a more creative role that might not be appealing to those who prefer a lot of structure, but it allows a more entrepreneurial underwriter to flourish while expanding their underwriting prowess and depth of insurance expertise,” notes McDougall. “This is the kind of underwriter I advocate for at EIURS.”

In this environment, underwriters have the autonomy to think freely and creatively and with an entrepreneurial spriritspirit , which can add immense value to a general agency. At EIURS, this enables underwriters to provide better client outcomes through tailored, specialty solutions for brokers and insureds, as well as more profitable results.

Four pillars of a successful underwriter

Whatever approach they take, all underwriters must have a solid skillset to succeed. According to McDougall, there are four distinct pillars that represent the foundation of an underwriter. They include:

  • profitable production
  • marketing and sales
  • forms and language
  • and monitoring and development.

“In terms of priority, these pillars are fluid and often entwined, and one does not come before another.” he adds.

The profitable production pillar includes the ability to maintain underwriting discipline, a knowledge of the competition, and an understanding of the role of reinsurance. It also entails a thorough grasp of how to deploy capital and at what cost, as well as a clear picture of the attachment point, which is where one person’s liability ends on a claim and another’s begins.

Of course, marketing and sales are essential to the underwriting role. Underwriters need to know how to cross sell internally with complementary programs to maximize revenue. They also need to be skilled in managing relationships with brokers and agents through face-to-face and virtual meetings, phone calls, and digital marketing activities, such as blogs.

Customers expect underwriters to have an in-depth understanding of all the policy forms and language they are using, as well as have knowledge about what forms the competition is using. Because claims service is such an important part of a policy, underwriters must also be able to clearly explain the claims process. 

For the monitoring and development pillar, McDougall says it’s critical that underwriters are well versed in how to evaluate rates and agent and broker performance and make any necessary adjustments to optimize profitability. They should also keep an eye on new business opportunities, as well as programs and offerings that emerge as the market evolves and the needs of insureds change. Underwriters also need a grasp of all things financial in insurance, including GWP and EBITDA margin. 

“An underwriter cannot be successful by being  a master in just one pillar,” explains McDougall. “They must be well rounded.”

While this is not an exhaustive list of the skills seasoned underwriters should have, it captures the essentials they need to have a strong foundation upon which to excel. For McDougall, this is table stakes as he looks to boost revenue at his organization.

“All of our underwriters are trained on and continually develop these pillars so we can continue to offer innovative solutions to our brokers and provide profitable results for our carrier partners. This allows us all to continue to flourish and grow, and to drive the industry forward." he concludes.