What Makes a Good Underwriter?

By Ken Kukral

checklist

A recent article in National Underwriter got me thinking:  (read the full article here)

They boiled the qualities of a successful underwriter down to 4 things, but I think they left a couple things out.  The four things they found in a successful underwriters were:

  1. Maintain underwriting discipline
  2. Think outside the box
  3. Strive for a human connection
  4. Set yourself apart

Let’s discuss these and go a bit further.

Maintaining underwriting discipline.  Does this mean that the underwriter is consistent?  They look at a risk fairly and treat the risk the same for all agents?  They don’t write business they have any business writing (soft market expansion of classes).  To me this means the underwriter shows a long term consistent approach to looking at accounts.  The underwriter gives each risk a fair shake and you know they have given it a fair shot and priced it reasonably if they can write it.  No surprises.

I think this also means “looking for a way to write an account”.  Having an open mind and learning enough about the account to determine if it meets the underwriting guidelines for the carrier.  Over the years I have encountered many an underwriter who from the outset, is looking for a way to decline the account.  All gray area is taken in a negative connotation and unless ALL the stars line up, they will never quote the account.  All you want is for them to give it a shot.

Think outside the box.  In my thirty years in the business, this is one of the hardest things to master.  Many underwriters have become “box underwriters” and unless it fits the box, they decline it.  The “exception” underwriter is a dying breed and many underwriters are in fear of “coloring outside the lines”.  Just because a risk is unusual, one of a kind or “not like the others”, doesn’t make it a bad risk.  Some of my toughest “sells” to an underwriter has been accounts, they literally couldn’t have a loss, but the underwriter wouldn’t quote the account.  Coming up with a proper classification is an “art form” and not everything “fits the box”.

This can truly mean, looking for every possible angle to write an account.  Staying in the fight and duking it out till all your questions are answered and you have a comfort level with the account.   Especially if it is not a large account and will take some “work” to get the account done.  Not every coverage is readily available and might take some creative underwriting to come up with a solution.

A couple of examples of thinking outside the box:

  • We were able to come up with a solution for a large account where if they invoked their disaster plan and the hurricane veered off and there was not direct physical loss, they would have lost $1,300,000. So we were able to negotiate with a carrier for false trigger of disaster plan coverage.
  • We were approached by an agent whose client was a plaintiff’s law firm. They had evidence and documents stored in a warehouse, awaiting trial and were looking to insure for the expected settlement or award judgement that would be “compromised” if that evidence was destroyed by a direct physical loss.  Due to the “valuation” issue, we were not able to secure this coverage, but were able to find a carrier who would insured for the amount of expenses already expended on the case that would not be able to be recouped.

Bottom line, a good excess and surplus lines broker, who has been in the business for many years, has a wealth of knowledge and can many times find “solutions” to clients risk problems, by thinking outside the box.

Strive for human connection.  Trust is earned with an underwriter and the human connection cannot be under estimated.  So many times, submissions are e-mailed in without any phone conversation (or even a narrative).  Running an account past an underwriter can pay excellent dividends.  You find out what information they want, what the chances of placing the account and what the “hot points” are in dealing with the underwriter.  By having a preliminary discussion with the underwriter you can approach a potential client and get them on the same page with the underwriter from the beginning.  This will help a client feel like they are both working towards the same end and are not on either side of the fence.  This reduces a chance for us, versus them type of scenario.

How many times have you seen where after a face to face meeting, a dinner or an agency visit with the underwriter, you all of sudden start writing more business with that carrier?  A chance occurrence?  I think not.  It is a matter of building the relationship with the underwriter, finding common ground and a human connection.  It takes time and is a building process that pays long term results.

Set yourself apart.  Stand out in the crowd.  Don’t be a faceless drone.  Be the one they want to call first.  So this might entail taking more calls, sending periodic updates on where things stand or JUST GETTING THE JOB DONE.  While just getting the job done may not seem like something that sets you apart, it is.  As an underwriter, you want to be the “go to” underwriter.  The one they call first when they get a new piece of business.  The one who gets the “last shot” on an account.

This might mean staying late to get them a quote, knowing their cell number so you can get a hold of them at a moment’s notice or finding out up front what their client expects so you both don’t spin your wheels if you can’t meet the timing or pricing expectation.

So what did they leave out?

Qualifying accounts – Every underwriter can’t quote and write every account that comes in the door.  So asking a few questions up front, possibly putting out a rough indication or even declining an account if you know you can’t be competitive.  Respecting both your time and their time can be critical and will be important in the long term.  Who wouldn’t like to quote fewer accounts, but write more of them and have a higher hit ratio?

Just being responsive.  There is nothing better than a quick response.  Even if it is, hey, I received your submission and will look it over, looks like something we can do.  You would be surprised how many times, the first quote in gets the order.  Also remember a “quick no” is also good.  Allows the agent to go on to another carrier who can help them out.  This type of quick response can leave you in the number one position so you get first shot at that agent’s business.

Anything I missed?  Any other characteristics of your favorite underwriter?   Would love to hear your thought!

Ken KukralKenneth Kukral, CIC – VP of Special Risks – That means, call me if you need help on placing a unique, difficult, large or more complex risk. Kennethkukral@intlxs.com  800-937-3497 ext 2079

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Questions to ask prospective clients

Are there questions we should be asking prospective clients that we aren’t that would help us to better understand what they want?

Are there questions we are afraid to ask prospective clients?

Are there questions we should be asking that would help us to “qualify” prospective accounts?

I have a feeling that the answer to all three of the above questions is yes.  In fact I KNOW the answer is YES!  I do a post mortem on accounts I lost, didn’t write or spent significant time on and wondered if there were questions I should have asked that would have helped me to do a better job.  Questions such as:

  • What kind of premium or rate are you expecting or the insured is expecting? While they may not know, many times they do.  I have saved a lot of time and effort by just relaying minimum premiums for certain classes of business and found out they were expecting something significantly less.  That way the agent is able to move on to the next account and not spin their wheels that they aren’t going to write.
  • Why do you want to fire your current agent? Using a word like FIRE puts a touch of reality to the situation and many times the client will tell you what is important to them that the other agent is not providing.  If they say “they aren’t sure they want to fire their current agent”, then you have your work cut out for you.  Most likely they are just price shopping and you will have to work to differentiate yourself if you are going to have a chance to write account.
  • When do you need the quote by? Simple question, but I am surprise on how few it is asked.  It is essential if you want a clue as to what your prospective client is expecting.  Isn’t selling all about meeting or exceeding expectations?  If we don’t know the clients expectations, how do we have a chance to meet them?
  • What kind of premium are you currently paying? How many times have you worked an account, didn’t write it and found out the premiums they were currently paying after the fact?   If you knew up front you might have decided to not waste your time since they already had a great deal!  If they won’t tell you, that is a signal they are price shopping.  Do they think if you know what they are currently paying you will come in just barely under it?
  • If they don’t currently have coverage, why are they looking for it now? I know a number of carriers that don’t like accounts that do NOT have current coverage.  They found when they did “look backs” on the accounts that experienced losses, that the loss ratio for accounts that did not have coverage directly before them, experienced more losses.  I think the answer to this question, tells a lot about the potential client.  If they cancelled previously for non-pay, is this potential client going to be a payment nightmare or more susceptible to losses?  Are they only looking for coverage now since someone else is requiring it?  This is not necessarily a bad thing, but is important to know.
  • If they move coverage to different carriers over the last few years, why? They are most likely driven by price, don’t have any loyalty and don’t understand the true “cost” of switching carrier often.
  • Do we ask about their website? I can’t tell you how many times I do some internet research on a prospective account and the agent is unaware of what I found.  Many underwriters do the same thing and I hate to be “caught with my pants down” and unaware of what the insured’s website says or what is available on the internet about them.
  • How did you hear about us or come to call us? Did someone suggest us to you?  This give you some information on where your business is coming from and what is working.  If they were sent to you by another client, it lets you know who you should thank!
  • What is your biggest concern or what keeps you up at night about your insurance program? Again, it helps you to better know your client and find out what their “hot buttons” are.  Besides, if you don’t ask questions like this, how will you ever know?
  • Tell me about how you got started…. People love to talk about themselves and tell “their story”.  Knowing more about their “passion” and what makes them successful will help you to protect that commercial client.
  • What is their tolerance to risk? You will most likely get a confused look when you ask this question.  Ultimately you are there to properly protect their assets and they need to know more about what risk those assets take.  This is an opportune moment to help educate your potential client and help them understand what you are looking to do.

Finally…. Ask the prospective client if there are any questions you haven’t asked that they think you should?  This lets you know where you stand and how close you are to being on the same page.  Another expectation assessment moment.  If you are having to extract information and they are not very forthcoming, it will be hard for you to do your best job for them.  If it is a “need to know” type of environment, you have not built the trust element enough and are in for a bumpy road ahead and a reduced chance to write the account.

Keep in mind, you are there to learn about the account and portray them in the best possible light to the carrier to get them the best terms, most appropriate coverage and meet or exceed their expectations.  So ask away!

Ken KukralKenneth Kukral, CIC – VP of Special Risks – That means, call me if you need help on placing a unique, difficult, large or more complex risk. Kennethkukral@intlxs.com  800-937-3497 ext 2079