Three words underwriters never want to hear
Two underwriters share common 'red flags' in insurance submissions and what brokers can do to avoid them.
There are three words we, underwriters, never want to hear: “All info forthcoming.”
When brokers write submissions that have obvious red flags, they’re likely to end up at the bottom of the pile — especially if they don’t take the time to explain what’s going on.
Communication is the solution. Insurance is still a people business; despite all the technology in place, the most successful brokers are those who communicate clearly and directly and who, over time, build relationships with underwriters.
Here are a few warning signs that give us pause — and what brokers can do to avoid them in submissions.
Open losses, high reserves
If a submission indicates that a claim is open and that the amount reserved to pay it is high, the underwriter needs more information before deciding whether or not to quote.
What actually happened? What is the claim alleging? Why did it happen?
It can become time-consuming to ask for details, as one detail will typically beg another question. To avoid that back and forth, brokers should include a brief outline of losses.
Things can get messy if an underwriter writes the policy and then receives unfavorable information. It could lead to the quote being pulled at the last minute when the policyholder already needs to have the coverage in place.
Certain classes
A submission may contain a reinsurance exclusion that can’t be considered or a risk that the provider is trying to underwrite more carefully.
In the environmental industry, customers can face multiple exposures at one time, including casualty, pollution, professional and site, so that can complicate the process from the get-go. Having a thoughtful and comprehensive submission is extremely important.
When reviewing a submission, insurance underwriters need a comprehensive context of the situation.
Even broken out by certain areas of coverage, it’s important that the broker provides detail about the operation of the insured. If the client is a products manufacturer, we want to know the chain of commerce and who the end-user is. If it’s something potentially more hazardous, such as a chemical manufacturer, we need to know the aspects of the chemical.
Technical jargon
Underwriters may not always be experts in the policyholder’s industry, so if a submission is full of that industry’s technical vocabulary, it could significantly delay the process.
It requires us to research what the policyholder does in layman’s terms. If the agent or the wholesaler can provide an everyday-person explanation of highly technical processes, that saves us time and gives us a stronger point for going forward.
Conclusion
In sum, the submissions that utilize clear communication techniques by providing sufficient context and avoiding technical jargon are the ones that we are able to process more efficiently. In environmental submissions, in particular, we know the risk profile is complicated, but the more information brokers can give us, the more likely we are to support them sooner. And remember, ‘All info forthcoming’ won’t help anyone.
David Corry (david.corry@argogroupus.com) is senior vice president, Environmental Practice Leader, and Cassie Wideman is an underwriter at Argo Environmental.
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