Tag Archives: underwriter

How to Catch the Underwriter’s Attention

Newcomers to the insurance industry face no shortage of challenges. If you’re a broker embarking on a career in insurance, you need to learn a variety of skills and navigate an ever-changing landscape. Among the most critical skills you need to develop early on is the ability to forge relationships with underwriters and put forth robust insurance applications and supplementals. Knowing how to communicate effectively with underwriters and providing them with quality submissions will be pivotal to your career.

On an average day, a typical excess & surplus lines (E&S) underwriter may review 16 to 20 submissions, so getting yours to the top of the pile is critical. Underwriters consider three important factors when prioritizing the submissions in their pile: (1) if the submission is complete and detailed, (2) if it fits their appetite and (3) if it’s from a broker who is known and trusted. So, how do you get yours to the top of the pile? Here is my three-step guide:

Step 1: Start with trust

As with any other successful relationship, trust is essential. Underwriters will always prioritize a submission written by a broker they trust. The first steps in building these relationships are often awkward, but getting over that uneasiness is critical. Pick up the phone and get to know the underwriters you work with. Try to find common interests to bond over, such as sports, music or cars. You don’t need to be best friends with underwriters, but you do need to reveal your personality to them, rather than keep the relationship merely transactional.

See also: Underwriters Need Some Power Tools  

You also can build trust by showing an underwriter you understand his or her company and its appetite. Being prepared goes a long way for underwriters who work on tight timelines and have busy schedules. Learn what underwriters seek before submitting, patiently answer any questions they have and be respectful of their schedules. When you’re able to demonstrate that you understand their unique appetites, you’re making their lives easier and helping to build trust.

Building trust is the most important step because everyone, unfortunately, carries some hidden bias, intentionally or not, that goes into the decision-making. If an underwriter receives two submissions of equal quality that both fall within his or her appetite, the one from a known and trusted broker will likely get preference. Even submissions on the fringe of an underwriter’s appetite are more likely to be considered when coming from a trustworthy source. The human factor will always play a role in the decision-making, so, if you establish trust, the hidden bias will favor you.

Step 2: Write an effective submission

While building trust is a critical first step, it won’t mean anything if you can’t craft submissions that grab underwriters’ attention and save them time. With so many submissions to handle each day, underwriters will always favor those that include as much information as possible, provide specifics, anticipate questions and include summaries. A good broker knows the specific information and answers that underwriters seek and provides those. It’s best to provide as much information as possible about operations, losses and exposures. It’s okay if you don’t have every specific detail, but make sure that what you provide is as accurate as possible. Be transparent, and let the underwriter know you’re working to obtain more information. Also, be prepared to take no for an answer. It’s okay to ask for a justification, but being agreeable and understanding will help you next time.

At the end of the day, underwriters are looking for submissions that save them time. By putting forth a submission that includes summaries, provides specifics and anticipates questions, a broker significantly enhances his or her chances of getting the submission to the top of the pile.

Step 3: Communicate effectively

Knowing how to communicate properly after putting forth a submission is the third most important step you must learn. One easy way to differentiate yourself among other brokers is to include a cover letter. This is a great way to kick off your communication around a submission, because it provides underwriters with a concise summary of what to expect, thus helping them understand the information that follows and saving them time. (Notice a pattern here?) Your cover letter also gives you an opportunity to call out specific items you know the underwriter will be concerned about, immediately showcasing your value. Just a simple email up-front with a summary will do.

It’s also very helpful to promptly follow up by phone – not email – with underwriters to provide an overview of your submission after you’ve sent it. Of course, you don’t want to be annoying, but staying persistent is key. After all, it’s the squeaky wheel that gets the grease.

See also: 14 Keys for Broker-Underwriter Ties  

Embrace the future

Taking these three steps skillfully and consistently will set you up for success in your career as an insurance broker. Remember, however, that they are just the basics. As our industry changes at a rapid pace, the brokers who understand and embrace future trends are the brokers who will thrive. Underwriters want to work with brokers who keep pace with change. So my last bit of advice to brokers is to become an expert in one of these trends – whether it’s IoT, automation, hydroponics or clean energy. If you gain a reputation as a forward thinker, you will stand out now and in the future.

The Insurer of the Future – Part 2

If I were a young actuary or underwriter, I’d be worried — because the Insurer of the Future won’t have much need for my skills.

What do these professionals do for a living? They rely on their personal experience and various data sources to understand and price a risk more accurately. Sometimes they carry out complex statistical calculations in support.

See also: How Underwriting Is Being Transformed  

But the Insurer of the Future will have its experience data captured on its internal systems. It will also tap into vast amounts of additional data available from external sources, some structured, some unstructured. And it will channel all of this data — far more than a human actuary or underwriter could ever handle — to its artificial intelligence (AI) engines.

These AI engines will examine the data for patterns, apply multiple statistical models and add their own experience from previous analyses to come up with a much more accurate price, massively quicker than a human ever could.

And for the Insurer of the Future, the AI engines will be wired directly into the sales and underwriting processes, which will operate “straight through,” with no involvement from humans.

There will be room for some human oversight roles to ensure that the AI engines don’t “go rogue” and generate crazy pricing — but the vast majority of actuaries and underwriters will no longer be required.

See also: Strategist’s Guide to Artificial Intelligence  

Please see “Part 3 – Claims Handling” for further predictions.

Cyber, Tech Security Start to Merge

A convergence between the cyber insurance and tech security sectors is fast gaining momentum.

If this trend accelerates, it could help commercial cyber liability policies create a fresh wellspring of insurance premiums, just as life insurance caught on in the 1800s and auto policies took off in the 1900s.

The drivers of change are substantive. As companies scramble to mitigate risks posed by steadily worsening cyber threats, insurers and underwriters are hustling to meet overheated demand for cyber liability coverage. The cyber insurance market expanded by roughly 60% from 2014-15, topping about $3 billion last year. ABI Research sees no slowing of that breakneck growth rate and estimates the global cyber insurance market will top $10 billion by 2020.

However, for that projection to be realized, the insurance sector must somehow attain the capacity to build reliable actuarial tables that are fundamental to any type of insurance sales. Trouble is, gauging a company’s security posture has turned out to be a much more complex endeavor than anything the insurance industry has mastered before — such as assessing human life expectancy or calculating how much risk to assign a particular driver.

There is endless network traffic data, to be sure. But, at present, there is no efficient means to bring it to bear. And to complicate things, companies fear bad publicity and often vigorously resist sharing the type of valuable attack intelligence needed to calculate risk profiles.

See Also: IRS Is Stepping Up Anti-Fraud Measures

“It’s the wild, wild West,” says Mike Patterson, vice president of strategy at Rook Security. “Everyone is jumping in the market chasing premiums, and they are doing it without a full understanding of the risk involvement, from an underwriting perspective.”

Enter the burgeoning tech security sector. Security vendors supply some $75 billion of security hardware, software and services annually. And with cyber threats continuing to intensify, tech security is on track to continue growing at an estimated 5% to 12% annual rate over the next few years.

As security vendors develop and deliver more sophisticated prevention and detection technologies, they are amassing larger, richer data sets about the resiliency of company networks. It seems obvious to some, but the accelerating convergence of insurance and security is inevitable.

“Underwriters are really trying to figure out how to quantify the risks of the policies they’re underwriting,” says Craig Hinkley, CEO of web application security vendor WhiteHat Security. “We’ve been researching our customers’ websites and web applications for 15 years, so we’re actually swimming in actuarial data right now.”

Models to watch

The questions of the moment: Who will be the early adopters?; and which collaborations will emerge as enduring models? ThirdCertainty interviewed a handful of tech security vendors at the giant RSA cybersecurity conference in San Francisco in March that are testing the waters. Here is a rundown on three of them:

WhiteHat Security

WhiteHat recently struck a partnership with Franchise Perils, an insurer of online retail websites —Franchise Perils will contribute toward the purchase of WhiteHat’s flagship service, Sentinel, for any online retailer purchasing a cyber policy. This amounts to a steep discount, enticing clients to use WhiteHat’s cutting-edge technology.

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Craig Hinkley, WhiteHat Security CEO

Part of WhiteHat’s services include helping corporate clients test their digital defenses with a small army of ethical hackers who “attack” the company and expose weaknesses. If a company quickly fixes its vulnerabilities, WhiteHat will give it a higher score in its WhiteHat Security Index, ranging from 0 to 800 — similar to a credit rating for consumers.

“That translates into a safer, more secure website and web application, which reduces the probably of you being hacked,” Hinkley says. “And that’s exactly what underwriters need to know for cyber insurance policies.”

For businesses that fix their vulnerabilities, WhiteHat guarantees the companies will not get hacked. If they do get hacked, WhiteHat will pay as much as $500,000 in remediation costs for the data breach.

FourV Systems

This start-up has just introduced an innovative threat intelligence monitoring and security posture scoring system aimed, for the moment, mainly at large enterprises in financial services, healthcare and government.

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Casey Corcoran, FourV Systems vice president of strategy

FourV’s goal is to enable a large retailer or bank to monitor the status of its network security day-to-day, or even hour-to-hour, much as a business routinely tracks daily sales, says Casey Corcoran, vice president of strategy at FourV.

“You could tell by noon whether the pattern that you’re seeing in your risk is shaping up properly for that day of the week,” says Corcoran, a former tech executive at Jos A. Bank Clothiers. “If it’s not, you can fix it.”

FourV CEO Derek Gabbard foresees a day in the not-too-distant future when a senior executive will wake up in the morning, glance at her Apple watch and use a FourV app to check the company’s security risk index.

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Derek Gabbard, FourV Systems CEO

The idea is to create “risk discussions that are nontechnical, easy-to-understand and jargon-less for the leadership team,” Gabbard says, “so that they have confidence in the work that the chief information security officer and his teams are doing.”

Once FourV gets some traction and amasses large enough data sets, it expects to be able to see — and eventually to be able to predict — risk patterns in vertical industries. Such analysis should be very useful in building actuarial tables, Gabbard told ThirdCertainty. The company already has begun brainstorming how it might go about selling that data directly to the insurance industry, perhaps even by developing a dashboard customized for underwriters.

Rook Security

This tech security vendor supplies managed security services and does forensics investigations of network breaches. Rook investigators respond like a cyber SWAT team to all types of cyber threats, whether that may be a minor data breach that is easily fixed or a deadly cyber attack that requires teams of cyber investigators to jet around the globe.

Listen to a podcast: Drivers behind the rise of cyber insurance

Communication surrounding cyber attacks can be messy and full of mistakes that worsen the damage, according to J.J. Thompson, Rook’s CEO. So Rook’s new War Room app has set up a digital command center for tech and security teams to monitor attacks and to respond swiftly.

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Mike Patterson, vice president of strategy, Rook Security

Whether Rook arrives before or after a breach, it quickly gets an inside look at the state of network security. Mike Patterson, Rook’s vice president of strategy, told ThirdCertainty that the readiness of companies varies widely. Some companies boast strong security staffs, resources and planning, while others only have one or two full-time security people — or none at all.

“Not everyone is as prepared as they should be,” Patterson says. “But that’s changing, with much more awareness now on the importance of security and taking care of your data.”

Rook is seeking to be the default option — brought in by the insurer — for post-breach incident response and forensics. It is also looking to provide a service where Rook would be retained by a company to come in and improve security postures so the client qualifies for cyber coverage or gets better pricing.

“It’s a really good opportunity to go shopping for cyber insurance because you’re going to get great rates, and everyone is going to be a little bit slack on the writing terms because they want that business,” Patterson says.

ThirdCertainty’s Edward Iwata contributed to this story.

The Questions That Aren’t Being Asked

In Aldous Huxley’s 1931 novel Brave New World, many original ideas were posited about a futuristic society. Two of those ideas, appearing in our present, involve eugenics and an ever-increasing reliance on technology.

Techniques like CRISPR (clustered regularly interspaced short palindromic repeats) to genetically engineer a human embryo, and technological advances like self-driving vehicles, could be said to represent some of Huxley’s notions. However, professional liability underwriters, especially those underwriting cyber liability and tech E&O, are out of phase with this “brave new world,” and this fact creates a dangerous situation for both those underwriters and an economic world dependent on them. To be responsible and successful in the present and into the future, the professional liability insurance sector must look backward to look forward and, in so doing, create a breed of underwriters who are every bit as creative as the future will be.

Being out of sync with present-day reality is clearly represented in questions not asked on cyber liability and tech E&O applications. For instance, one current cyber liability application does not ask what type of firewall an applicant is using. A company can use a simple device with a firewall feature and claim to have a firewall in place, but that device will not come close to equaling the protection offered by a hardware-based NGFW, or Next Generation Firewall. The same application also does not ask if multiple hardware and software ecosystems are used, even though the answer to that question, especially for a medium-sized and large business, offers significant insight into the company’s cyber security approach. Additionally, this particular application does not ask whether an applicant is using the services of a cyber security firm. Those kinds of questions, and the answers to them, convey an enormous amount of information about the cyber security posture of an applicant and, in turn, provide significant insight into whether a risk is worth underwriting and at what cost. For such questions to be missing from an application is dangerous for insurance companies and the clients of those companies.

See Also: Space, Aviation Risks and Higher Education

The current situation with technology E&O applications is equally worrisome. For example, in the exclusions list on one recently updated technology E&O policy there is no exclusion for computer languages known to be highly prone to cyber breaches. Theoretically, an insured software company could be writing code in Adobe Flash or Java Script, languages that should be avoided. By not excluding those languages, the insurer is exposed to adverse results of claims and lawsuits caused by an insured using hazardous script. Perhaps even worse, this insurer does not exclude wireless products that do not include proper encryption. Thus, if a company that produces baby monitors creates a product that broadcasts the signal in an unencrypted format, claims could arise from a concerned consumer of that product. After all, what reasonable parent would allow anyone to spy on her child?

This issue is likely even worse because, time and again, successful lawsuits have already been brought against manufacturers of products that lack proper wireless encryption. The absence of such exclusions to protect itself and to encourage better behavior from its insureds calls into question whether a technology E&O insurer is in sync both with technology and the current legal environment. With underwriters being out of step in the present, one must wonder how they will be able to help drive the world forward in the future.

There are other parts of the professional insurance sphere that are not poised well to be in harmony with the future. In the near future, robots will be introduced into social environments like nursing homes. If a robot injects medication into a patient, prescribes a medication or lifts a patient from a wheelchair to a bed, then that takes an already risky situation into an unexplored legal realm. If a patient suffers an adverse reaction to a drug that was injected by a robot, then how will the nursing home be protected by any of its insurance policies? Or, what if a robot is provided by the nursing home to a patient who needs companionship? If the robot malfunctioned and could not be replaced and the patient drew into a depressed state and died, then how would insurance cover a wrongful death suit by the patient’s family? A general liability policy certainly would not cover such an event, and an allied health policy is not currently worded to handle such a risk. What about the manufacturer of that robot? Would a technology E&O policy step forward and indemnify the manufacturer of the robot?

Most countries, especially those like China, Japan and the U.S., have populations that possess far more elderly people than younger ones, and there are simply not enough people entering the field of senior care to handle the influx of those who need care in their golden years. This means that robotic companies are going to be filling that void and, in so doing, will create an unprecedented situation that will require the professional insurance sector to provide guidance and protection to the rapidly aging world. To provide that guidance and protection, however, will require professional underwriters to understand the intersection of technology, human care and the law, an intersection with which underwriters are currently less than conversant.

So how do insurance companies offering cyber liability, technology E&O and other professional insurance get into sync with the evolving world they are underwriting? There was once an international competition that encouraged students in the seventh through twelfth grades to form groups of two or three people and build educational websites. The competition was known as ThinkQuest. It was supported by both governmental and private organizations, had strong support from educators in more than thirty countries and rewarded the most successful competitors with scholarships of as much as $25,000. A similar approach must now be embraced and championed by the insurance industry. The brilliance of ThinkQuest was that it brought together young people who could appreciate and understand a multitude of ideas, numerous bodies of knowledge and people who were willing to learn and teach at the same time and who could convey their ideas both by the written word and binary. The spectrum of ideas that the groups put forth ranged from examining a social phenomenon like Harry Potter to examining how music affects people’s mental and physical health.

To be able to fully appreciate and understand nearly every cyber liability and technology E&O risk requires people who have an uncommon breadth and depth of knowledge that extends from simple areas like grammar to complex areas like quantum mechanics. When an underwriter tries to underwrite a risk like SSA (space situational awareness), to underwrite a risk in which a company produces electronic-photopic chips or to understand memory-resistant malware, that requires a degree of understanding that is clearly not being demonstrated by the majority of the current breed of underwriters. However, the degree of wide-ranging creativity needed here was what the ThinkQuest competitions were created to foster in young people. The insurance industry needs people who can draw from a wide range of knowledge, and it also needs people who can write binary code with exactitude. Insurance companies must employ cyber forensic engineers who can pinpoint where a security breach happened, how an intruder gained access to additional computers and how to remedy the situation.

Being able to work individually or in a team, being able to backtrack to the point of intrusion and being able to view the world in tangible and non-tangible ways requires more than someone who can simply write one line of code after another. Currently, insurance companies depend on other companies to investigate data breaches, but this will not work out in the long run. In the 20th century, numerous insurance companies owned law firms to litigate claims economically. The 21st century will require cyber liability insurers to employ cyber forensic engineers to investigate claims based on network breaches. Moreover, in the very near future insurers will need to create an organization that tests routers, switches, servers, smart phones, robots and other technology devices to determine how secure or how capable those devices are. As has already been argued on the PLUS Blog in November 2015, not all technology devices are created with the same expertise, and figuring out which devices are least and most secure will greatly facilitate insurers’ ability to price policies correctly. However, to find young people who can view the computer realm in multiple dimensions, and to find those who can function in a cross-disciplinary environment and approach a risk from a multitude of angles can only be successfully accomplished on a large scale through an instructional competition.

People who have a broad and deep appreciation for multiple disciplines and cyber forensic engineers are uncommon, and insurance companies are not the only ones who need such thinkers. cyber security companies, law firms, private and public educational organizations, research organizations, think tanks and governments are just a few sectors that need those type of people. This means that, as difficult as it is already to find thoughtful insurance people knowledgeable about the cyber world, the future is only going to be exponentially more troublesome.

When the 20-year-old who is going into her senior year at college thinks about the past and future, what will she strongly consider for a career? Will she remember the competitions that the insurance industry hosted that allowed her to cultivate friends from all over the world, and allowed her to gain the needed assurance in her skills as a programmer or a writer to pursue a major in computer science or history? Will she remember the competitions that helped fund her time at college, and in doing all of that proved that being a cyber liability underwriter is a fulfilling career opportunity? Or will that 20-year-old have nothing to remember where the insurance sector is concerned?

The Cyber Security Challenge is one competition that currently aims to increase the pool of cyber forensic engineers; however, it is not an international competition and focuses only on people who are capable of becoming cyber forensic engineers. Professional liability insurers need thinkers and tinkerers, and locating both on a large scale can only be accomplished through a competition like ThinkQuest. Nano-technology, advanced robotics, augmented reality and memory-resident malware are elements of a brave new world that cyber liability and tech E&O insurers are going to come face-to-face with in the short term. In three to five years, insurers are going to encounter robots where none have been before. If insurers do not create and enthusiastically support a competition like ThinkQuest, then insurers will not be acknowledged or remembered by those in college. Consequently, insurers will find themselves without a breed of underwriters who can thrive and understand the brave future. This must not be so!

How Colleges Can Work With Insurers

If you sit down with just about any college administrators and ask about the vision of their university, you may witness a dramatic change as their voices fill with passion, reserve disappears and the entire tone of the conversation shifts away from being transactional. As an insurance broker specializing in higher education, I have witnessed this transformative moment many times. Unfortunately, the passion for the institution, its vision and its future does not always translate into the insurance submission and renewal process.

Many people, including some insurance brokers, view buying and selling insurance as a passionless transaction. Information about the college—such as financial statements, property values and loss experience—is gathered, tabulated into Excel spreadsheets and forwarded on to the underwriting arm of seemingly interchangeable insurance carriers. Underwriters review volumes of data about the college to decide whether the insurance company can comfortably provide a college with a certain level of insurance coverage in exchange for a fixed annual premium.

See Also: A Practical Tool to Connect Customers

The information provided to an underwriter creates a story about the college. Depending on how the information is received and presented, the story can be positive or negative. To the underwriter, sometimes the insurance submission can be as horror-filled as a Stephen King epic or as romantic as a Nicholas Sparks novel. Of course, the insurance submission is not a work of fiction.

One of the first things that statistics students learn is that the same information (data set) can be used to draw multiple and sometimes competing conclusions. Where one person may see positive potential, another may see an organization in decline. The conclusions drawn from the data set by different insurers and underwriters reviewing the same information may vary significantly.

Why?

Though the information contained in a submission or application may be objective—meaning the information has not been altered or manipulated—the conclusions drawn from the information are less so. The underwriting process involves both subjective and objective analysis. And how the data is interpreted may have a significant impact on the underwriting decision and, ultimately, on the total premium an organization pays.

Using Data

According to a Harvard Business Review article, data can be used as a visual mechanism to direct the narrative surrounding a particular situation. The key is to:

  1. Identify the narrative or the core message the audience should walk away with;
  2. Identify your target audience and figure out what they are interested in—is the presentation to an underwriter, claims adjuster, insurance company executive, etc.?;
  3. Remain objective and offer a balanced viewpoint—your credibility will suffer if what is being said cannot be supported by the facts;
  4. Not censor the data—do not exclude unfavorable information, and this is especially important in an insurance setting as failure to disclose information can constitute insurance fraud; and
  5. Take the time to edit—not the data itself, but how the information is presented.

There are many different methods for presenting the narrative of an institution in the most positive light possible while still providing objective information. The first step to understand both the positive and negative elements. This allows the institution to showcase itself in the best light possible. A failure to fully engage in this process may leave the narrative open to misinterpretation, create questions about unexamined negatives and result in overlooking one or more positive elements.

Communicating the story of an institution involves a deep understanding of the goals and vision of the institution, and there is no one better to communicate that story than a passionate college administrator. However, understanding what drives your institution is not enough—and that is where administrators need to leverage key professional relationships. Selecting the right broker is a key step in driving the narrative forward. A professional partner brings market knowledge and the ability to help transform the narrative from numbers into a story that honors the vision of the administration.

Developing Key Relationships

The majority of colleges and universities work with one or more insurance brokers to engage with the insurance marketplace. At minimum, a broker working with an institutional client assists in (1) identifying insurable exposures, (2) preparing recommendations for coverage types and limits, (3) identifying potential insurers to approach, (4) developing the insurance submission, (5) negotiating pricing and coverage terms and conditions with the markets and (6) presenting the carrier quotes to the institution.

Institutions at every level can rely quite heavily on the services and recommendations of their insurance brokers. The broker can play a critical role between having a well-structured insurance program and having a potential mess of overlapping coverage, gaps in coverage, inconsistent coverage terms, out-of-balance limits and potential claims issues. The broker can also act as a key resource in communicating the organizational narrative to the underwriters.

There are four key elements a broker adds to narrative development:

  1. Market Knowledge: Insurance brokers keep abreast of developments in the marketplace, including insurer appetites: Like any company, insurers have target or preferred customers. Being in an insurer’s target class can provide premium discounts and coverage enhancements. Insurers typically understand the risk exposures associated with their target customers and are comfortable underwriting these risks and adjusting claims. For the insurance client, this means (1) access to expertise from an insurer that understands your institutional risk and (2) comfort in knowing the insurer has an understanding of institutional risk and will be unlikely to cancel or withdraw coverage in the event of a claim. Ultimately, it does not make sense to send an application to an insurer that does not understand or have a comfort level with higher education risks. Insurance brokers also keep abreast of market conditions. For the past few years, insureds have enjoyed relatively stable insurance rates and coverage offerings. It is currently the norm to see flat program renewals and even rate decreases in several key insurance coverage lines. However, it is unlikely that this trend will continue long -term, and it may be significantly affected by: 1) Mergers: The insurance market is changing as insurers look to increase market share and underwriting profit while minimizing exposure to catastrophic losses and unprofitable lines of business. 2) New Market Entrants: There has been an influx of third-party capital into both the insurance and reinsurance markets, resulting in lower insurance prices in the short term. The question is whether these new entrants are here to stay and whether capital levels have peaked.
  2. Underwriting Guidelines/Expectations: Understanding how underwriters use information is a key element of the narrative development. Different insurance carriers use underwriting information differently. Customizing the insurance submission to highlight critical (or essential) information that will be viewed favorably by the underwriters make a big difference.
  3. Risk Analytics: Analytical services provide a more complete picture of organizational risks, claims trends and opportunities for improvement. These services may include claims dashboards, benchmarking analytics, property valuation and catastrophic loss exposure analysis. This is really where brokers can distinguish themselves. Effective use of analytics allows the institution to home in on key risk and loss drivers and develop a risk management plan to address problem areas early. Early identification processes and plans can be communicated to underwriters as part of the application process. This can be critical for institutions with past losses, as it demonstrates steps to control future loss and an awareness of university exposures.
  4. Alternative Program Structures/Alternative Risk Transfer Options: Not every risk can be transferred, and not all risks are adequately covered by buying off-the-shelf insurance products and services. Taking control of the insurance conversation may require a needs-based assessment of academic, administrative and financial processes to determine optimal (1) coverage types/limits and deductibles/retentions, (2) feasibility of self-insured or captive programs, (3) needed coverage enhancements and (4) key contributors to loss/potential losses.

Tips for constructing and delivering your narrative

Start early. Waiting until a couple of months before program renewal does not provide a great deal of time to develop a cohesive narrative or to allow underwriters the time needed to develop a real understanding of the institution. In fact, it can be beneficial to begin the conversation with a prospective insurer years before moving coverage from a current insurer. This is important even if there is a comfort level with the current program structure and insurance providers. Organizational risks are not static, and insurance programs change over time. Engaging in regular dialogue with underwriters at different insurance companies allows multiple carriers to develop an understanding of the college/university’s operations and risks. Developing alternative carrier relationships provides a backup plan.

See Also: Are Customers Like Berliners?

Know and understand your institutional risks and objectives. This includes both the positive and negative aspects. It can be easy to focus on the positives, but, as with an ostrich hiding its head in the sand, that may result in overlooking key dangers to the continuity of the college itself. You should:

  1. Create an internal risk review team made up of a diverse group of institutional stakeholders, such as human resources staff, facilities/housekeeping, faculty, administrative staff, board of trustees, alumni and students.
  2. Engage an objective third party, such as a risk consulting firm, or use the institution’s insurance broker’s analytical team.
  3. Participate in peer-review activities by engaging with administrative and risk management personnel at other institutions. Participating in risk management round-tables and discussions such as those provided by United Educators, URMIA and other educational insurers/associations can assist in planning for common areas of concern.

Use the data as a guide. As much as insurance brokers may wish otherwise, underwriters are pretty savvy people and will usually catch on to most omissions. It is very hard to recover from a situation where the underwriter feels misled about the organization—there is a loss of trust, respect and partnership that is impossible to get back. Be open and objective about the current position of the college/university. But do not allow the negative information to be all the underwriter sees—provide mitigating information such as steps the college is taking to: (1) improve loss experience, (2) attract higher enrollments or (3) renovate aging infrastructures. Underwriters want to write business, and most of them are looking for a reason to say “yes.”

Do not rely solely on the insurance application. The application gathers the minimum amount of information that an insurance company needs to underwrite a risk. If the institution is working with an insurance broker (as most do), it is important to collaborate with the broker rather than just cede the submission development process entirely to the broker. A broker (regardless of how good she is) is never going to be as passionate about your institution as you are. Get to know your underwriters—go to lunch, meet them at conferences, attend a carrier networking event or even schedule periodic conference calls. If all your organization is to an underwriter is a few sheets of paper submitted 90, 60 or even 30 days prior to a renewal, you will not get the underwriter’s full attention or consideration. Engage your underwriters.