Spot the difference for underwriters


This is an aerial view of main location of the risk to be insured: Generic plc.

Company activities at and associated to the premises include: Property Owners; Manufacturing (incl. use of heat & work at height); Assembly (incl. clean room); Warehousing; Import/Export (loading/unloading – incl. quayside); Plant Owner/Operators; Wholesale; Distribution; R&D; Design: IT (mainframe); Admin./Accounts; Training, etc.

For the purposes of the task, let us assume that they are 2, competing, risks both with identical processes, sums insured, limits with similar EML’s, operational structure, growth history, financial performance, global customer/supplier footprint, credit profile, risk management and claims experience. The type of enterprises that are within the target range of risks that you are charged with securing in a competitive market place.

However, one of the risks is, significantly (measurably), more resilient than the other…sufficiently so that it could provide you with the competitive advantage required to secure the account. So, as an insurance, credit or financial risk underwriter:

Q. How do you identify and differentiate between the good and bad risk, providing a verifiable basis for an underwriting decision that enables you to win the business? Read more of this post

Insurance: Feed the beast but ignore the elephant


Insurers are so desperate to maintain GWP that they will forego underwriting profit in its pursuit!

Every time the premium bar rises it benefits them but hurts individuals, households and businesses…in short the whole economy! This is how skewed the “logic” of the prevailing culture in financial services has become. And, believe me, they are comforted by the fact that Politicians, FSA and the general public concern themselves with “effect” rather than dealing with “cause”:

A morally corrupt corporate culture.   

The secondary industries that have sprung up around insurance claims – in particular motor accidents – bear testimony to this culture. Massive costs come back around to policyholders in the form of increased premiums. No surprise there then but did you know that much the costs come about as a result of insurers’ desire to secure income from lawyers who are happy to pay for details of claimants. Still not too shocking!?

How about if the insurer who may end up making payments is the same one that  is selling the details of a third party intent upon pursuing a claim, (for damages, personal injury) against them??? That’s right. Read it again if you need to but that is how it is!

An interesting article in a recent issue of Scotland on Sunday: Scottish drivers pay price for English law, touched upon the wider issues but contained this “alarming” quote from one company spokesman:

“someone is going to make money out of this referral. If there is going to be a claim anyway, it might as well be us.”

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