Carriers use a variety of mechanisms to support underwriters in executing deals that go against the underwriting strategy. Some common elements that leading commercial lines carriers use include:

Clear processes for information gathering, risk assessment, rating and quoting, including corresponding documentation (e.g., job aids, process flows, checklists)
Underwriting guidelines by Product, Industry, Geography, Distribution Channel
Letters of authority and clear escalation paths
Access to internal and external expertise (e.g., A.M. Best Underwriting Guides, industry trends, internal reference material, contact lists)
Proprietary risk selection and pricing tools
Business rules, predictive models, analytics (make sense of company experience, trends, & third party data)

The choice of which tools and processes are needed to embed the underwriting strategy in day-to-day decisions is dependent on the volume and complexity of submissions, the degree of underwriter expertise at the desk-level, and the maturity of the product or industry, among other things. That said, we have found that the following key considerations are critical in designing these mechanisms:

Make it easy. Design a streamlined underwriting process that prompts for the use of the appropriate tools, checklists, and reference material. Link any new resources to this process by updating process guides, requiring inputs based on the findings in the new resources, and/or designing user-friendly underwriting platforms that seamlessly incorporate new tools. Lastly, drive adoption through a training and communication plan that highlights the expected benefits and efficiency gains for the underwriter and details how any new resources should be used. In other words, make it hard to underwrite any other way.
Make it actionable. Provide clear guidance on how to use information in underwriting decisions. Do not overwhelm the underwriter with unnecessary information, or else the important content will get buried and likely ignored. For example, underwriting guidelines should clarify what areas are non-negotiable (e.g., writing general liability for a nuclear power plant) versus what guidelines are subject to other considerations (e.g., a building height restriction for Property).
Explain the "why." Clarify how underwriting guidance fits with the overall strategy through training, communications, and access to experts. This will help underwriters identify and justify exceptions to the rule. For example, carriers that have effectively implemented modeling into the underwriting process not only include a model score that directs the underwriter's risk selection and pricing, but also include detailed reasons on what account characteristics were considered and how they impacted the result. This allows the underwriter to account for inaccurate data inputs or factors not considered in the model. As an added bonus, it also empowers the underwriter to more intelligently explain his/her underwriting decision to the producer and client, strengthening the customer relationship and showcasing underwriting expertise.
Build in flexibility. Underwriting is not black and white, so the tools and processes to support underwriters should not be either. Be clear on what standards are non-negotiable to limit time spent on un-writeable accounts. Where there are gray areas, provide a range of acceptable options based on key information allowing underwriters to choose accordingly based on the account or situation.

Special Reports /

Embedding underwriting strategies in day-to-day decisions

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