Underwriting Expertise & Flexibility Importance to brokers

Brokers once again voted Underwriting Expertise and Flexibility the most important of all the services provided to them by their insurer partners.

For the second year running, this crucial service dimension has dominated the concerns of brokers participating in the Insurance Times Broker Service Survey.

And it is no surprise. Insurers’ expertise and flexibility in underwriting the risks presented for cover is fundamental to their relationship with brokers. It has the potential for knock-on effects on all the other service dimensions studied in the report such as claims, policy documentation, the claims experience and of course the overall quality of cover.

Quality of cover used to be brokers’ top concern. But as the more standard risks have become commodified and have been shuffled off to call centres, aggregators and e-trading platforms, non-standard and complex risks have become a more compelling part of the broker’s workload. Quality of cover is still key for brokers, coming in second in both commercial lines and personal lines.

Broker concern over the level of underwriting expertise and flexibility among their insurer parters was shown not only by the service criteria rising to the top of the importance table, but also by a sharp decline in the scores awarded by brokers to their insurer partners for this service area.

Across both commercial lines and personal lines, the average insurer score for Underwriting Expertise and Flexibility fell by 10% from last year to 3.75 from 4.15.

Tied in with underwriting expertise and flexibility is the ease with which brokers can approach underwriters with the authority to make key decisions. Hence Access to Decision Makers was the third most important factor for commercial lines brokers and fourth most important for personal lines brokers.

One Midlands based broker expressed frustrations with underwriting to be caused by a “lack of communication and no decision makers”, while a broker in Wales felt it was “difficult to get hold of underwriters, [they are] slow response and don’t generally tend to be competitive compared to others”.

One broker with over 30 years of experience in corporate insurance programmes felt insurers must revert back to the basics that made them so successful in the first place by providing strong communication, suggesting: “The whole industry now seems time-poor as workloads are streamlined and monitored, and yet how on earth can this produce efficiency when one piece of work could take five to ten minutes and another an hour or even all day”.

Furthermore, this Manchester based broker felt insurers must allow underwriters the time and trust to do the job they were trained for and allow them to take more responsibility for decision making.

Another London-based broker found a complete breakdown in service from one insurer, after years of high-level underwriting expertise, when the insurer relocated staff, giving no notice to brokers. He felt that the years spent building up a fruitful professional relationship with the underwriting team had gone up in smoke overnight.

he had spent years building a relationship with the underwriting team due to the insurer in question relocating staff, this particular broker felt the years he had spent building a relationship with the underwriting team had vanished and all flexibility was now lost due to staff relocating without notice to his brokerage.

Brokers complained that underwriting performance suffered significantly from insurers experiencing high staff turnover levels. They felt that left less highly-qualified staff unable to make key decisions in a timely manner, and gave mixed messages about appetite for risk.

And though brokers are understandably frustrated when a risk is rejected, they would rather the rejection came promptly.

“The underwriting staff are frequently out at the same time and on voicemail, necessitating a hunt for a decision maker, usually involving our BDM which is both time-consuming and frustrating,” said one broker.

A south east based based broker felt insurers must aim to match the complexities of a potential risk with the level of expertise in staff.

“As the complexity of risk rises insurers need to improve the service they provide to brokers by improving the number of qualified and technically expert staff who can engage sensibly with them to underwrite risks and look at support structures to engage in risk management and reduction,” he said.

“Even with the best insurers we have relationships with, we still experience issues in these areas”.

Brokers are concerned that cost-cutting by insurers is impacting their underwriting performance.

The move of standard risks to e-trading platforms has also impacted on the relationships and physical interaction between broker and insurer. And there are some who feel that drive for automation has gone too far.

“A return to actually discussing complex risks in detail with the underwriters in question also helps enormously - I think us brokers often feel that if we could only talk to someone with experience, perhaps we would all get further,” one broker said.

This year’s Broker Service Survey Commercial Lines saw Lorega and Manchester Underwriting Management share first place in the Underwriting Expertise & Flexibility category. Both firms scored 4.25 out of a possible 5. Covéa Insurance topped the personal lines survey with a score of 4.30.

Charles Manchester, chief executive of Manchester Underwriting Management said: “We require our underwriters to be experienced and trained technically. And everyone from the top down understands the importance of listening to what the broker is saying and, just as importantly, to what the customer needs.

“That means flexibility and thoughtfulness. For example, we recently had an Insured who had signed up to a contractual liability without taking advice as to the insurance implications; rather than ‘computer says no’, our underwriter took the time to understand the exposure and draft an extension that met the client’s needs.”

Lorega managing director Neill Johnstone thought simplicity of approach and a low staff turnover were key to providing the best underwriting expertise and flexibility to brokers:

“You’ve got to have the right people. All our people are experts, highly knowledgeable. Most are experienced because they have been with the business a long time: we have a very low staff turnover and we try and keep things simple.

“We don’t have complex models that can go wrong, we have really simple models, simple processes and we like to keep things simple because we know simplicity is easy and enables us to provide good service.”