|Underwriting second only to claims handling in value to agents|
Continuing an analysis of agents’ responses to PIA’s Company Benchmark Survey, we’ll look at how agents see their companies’ underwriting prowess. Agents rated 35 separate performance criteria, including six dealing with underwriting. Using a one-to-10 scale, 456 respondents scored each item according to how important it is in evaluating their relationship with a company. The claims-handling factors snagged the two highest-rated spots in this survey, conducted in spring 2009.
The survey tested the 35 items, including 16 standards on PIA’s annual Company Performance Survey. Results from the benchmark survey helped re-shape the 2009 Company Performance Survey. The results will be announced in the October issue of PIA magazine.
Of the six underwriting criteria, all scored 12 or higher out of 35 factors. Some may see this as surprising. However, the benchmark survey showed agents mainly value old-fashioned, bedrock insurance functions like claims, underwriting and service.
Tops among the underwriting factors, and ranked fth on the survey overall, is “underwriter knowledge, experience.” As a result, this item was added to the Company Performance Survey as a new factor on which agents rate their individual carriers. Although absent in years past, its importance had been suggested by many free-form agent comments about the strength of a company’s underwriting department—or lack thereof.
A benchmark survey respondent suggested a further dimension of underwriters’ value: “Most important of all, not mentioned here, is [the] broker/underwriter relationship and underwriter’s authority or clout with [the company’s] home ofce.” This comment, and others in the Company Performance Survey over the years, shows how truly the business remains grounded in personal relationships, earned respect and trust.
The following are the six underwriting items, in order of importance, ranked by how many respondents rated the item a 10 (the highest importance). This number is followed by the number of 10s as a percent of the item’s total scores: underwriter knowledge, experience (251 respondents rated a 10, 55 percent); agency has go-to underwriter(s) (246 respondents, 54 percent); stable market (237 respondents, 52 percent); consistent underwriting (236 respondents, 52 percent); exible when warranted (218 respondents, 48 percent); and speedy decisions (210 respondents, 46 percent).
In other words, even the sixth-placed underwriting item (speedy decisions) received 10s from nearly half (46 percent) of all respondents to the benchmark survey. As a result of the clear value placed on the underwriting function, underwriting-related items on the Company Performance Survey were expanded from two to four.
“Agency has go-to underwriter(s)” placed second (and for agency underwriting staff, it is the top-ranked benchmark factor overall). This fact again speaks to the power of business relationships. PIA thought long and hard, but decided not to include this item in the 2009 Company Performance Survey.
Some companies provide underwriting services through a stable of available underwriters; while some establish direct personal responsibility for certain underwriters to serve certain agencies. Both ways can work effectively, so setting “go-to-underwriters” as a performance item could represent an unwarranted value judgment on PIA’s part, that one way is the only acceptable way. It seems fairer that companies be evaluated on underwriter knowledge and experience.
For what it’s worth to interested companies, we think results of the benchmark survey (i.e., those 246 10s for go-to underwriters) speaks for itself. Sometimes, it’s the build-up of knowledge and trust between individuals that allows companies to be “exible when warranted.”
The other items, “stable market” and “consistent underwriting” at rst glance may seem similar and indeed received very similar ratings. Yet, when tested with veteran insurance people, the two statements mean quite different things. A “stable market” maintains availability, subject to the company’s own underwriting appetite, year-in and year-out. A company shows “consistent underwriting” by dependably sticking to its own clearly dened underwriting guidelines on each submission.
“Speedy decisions” rounds out the underwriting group, scoring well above the survey’s average. As agents say, “Speed sells.” They hate being left at the starting gate without a rate or an underwriter’s blessing—while a competitor (perhaps with an inferior product and price) at least has something to offer.-Kiehl
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