Closing the Gap: A Model for Commercial Underwriting
()
About this ebook
Related to Closing the Gap
Related ebooks
Leadership Risk: A Guide for Private Equity and Strategic Investors Rating: 0 out of 5 stars0 ratingsBusiness Interruption: Coverage, Claims, and Recovery, 2nd Edition Rating: 0 out of 5 stars0 ratingsThe Tech Entrepreneur’s Financial Playbook: Winning Plays for Forming, Financing & Operating Tech Companies Rating: 0 out of 5 stars0 ratingsMore Than You Wanted to Know: The Failure of Mandated Disclosure Rating: 4 out of 5 stars4/5Marketing the Legal Mind: A Search For Leadership - 2014 Rating: 0 out of 5 stars0 ratingsThe Irresistible Growth Enterprise (Review and Analysis of Mitchell and Coles' Book) Rating: 0 out of 5 stars0 ratingsEmployment Practices Liability: Guide to Risk Exposures and Coverage, 2nd Edition Rating: 0 out of 5 stars0 ratingsAccidents Waiting to Happen: Best Practices in Workers’ Comp Administration Rating: 0 out of 5 stars0 ratingsCondominium Insurance Coverage Guide, 2nd Edition Rating: 1 out of 5 stars1/5Macroeconomics and Development: Roberto Frenkel and the Economics of Latin America Rating: 0 out of 5 stars0 ratingsThe Tower and the Sea Rating: 0 out of 5 stars0 ratingsLicensing Tales: Captivating Stories from Industry Legends Rating: 0 out of 5 stars0 ratingsStarting An Independent Insurance Agency Made Easy Rating: 0 out of 5 stars0 ratingsNeuroeconomics Fundamentals Rating: 0 out of 5 stars0 ratingsPulse: Understanding the Vital Signs of Your Business Rating: 0 out of 5 stars0 ratingsTRIZ A Complete Guide - 2020 Edition Rating: 0 out of 5 stars0 ratingsNew Pricing Strategies Second Edition Rating: 0 out of 5 stars0 ratingsPacing for Growth: Why Intelligent Restraint Drives Long-term Success Rating: 0 out of 5 stars0 ratingsRepurchase agreement Standard Requirements Rating: 0 out of 5 stars0 ratingsVC Investment Standard Requirements Rating: 0 out of 5 stars0 ratingsIntelligent Business Operations Third Edition Rating: 0 out of 5 stars0 ratingsSink or Swim (Review and Analysis of the Sindells' Book) Rating: 0 out of 5 stars0 ratingsThe Theory of Incentives: The Principal-Agent Model Rating: 0 out of 5 stars0 ratingsOpportunity Cost A Complete Guide - 2020 Edition Rating: 0 out of 5 stars0 ratingsFoundations of Perceptual Theory Rating: 0 out of 5 stars0 ratingsProject Initiation Documentation Complete Self-Assessment Guide Rating: 0 out of 5 stars0 ratingsSummary of Ed Rush's The 21 Day Miracle Rating: 5 out of 5 stars5/5The Game: How the World of Finance Really Works Rating: 5 out of 5 stars5/5Managing Agile: Strategy, Implementation, Organisation and People Rating: 0 out of 5 stars0 ratings
Business For You
The Intelligent Investor, Rev. Ed: The Definitive Book on Value Investing Rating: 4 out of 5 stars4/5Emotional Intelligence: Exploring the Most Powerful Intelligence Ever Discovered Rating: 5 out of 5 stars5/5Your Next Five Moves: Master the Art of Business Strategy Rating: 5 out of 5 stars5/5The Book of Beautiful Questions: The Powerful Questions That Will Help You Decide, Create, Connect, and Lead Rating: 4 out of 5 stars4/5The Richest Man in Babylon: The most inspiring book on wealth ever written Rating: 5 out of 5 stars5/5Robert's Rules Of Order Rating: 5 out of 5 stars5/5Becoming Bulletproof: Protect Yourself, Read People, Influence Situations, and Live Fearlessly Rating: 4 out of 5 stars4/5Financial Words You Should Know: Over 1,000 Essential Investment, Accounting, Real Estate, and Tax Words Rating: 4 out of 5 stars4/5Grant Writing For Dummies Rating: 5 out of 5 stars5/5Collaborating with the Enemy: How to Work with People You Don’t Agree with or Like or Trust Rating: 4 out of 5 stars4/5Lying Rating: 4 out of 5 stars4/5Tools Of Titans: The Tactics, Routines, and Habits of Billionaires, Icons, and World-Class Performers Rating: 4 out of 5 stars4/5How to Get Ideas Rating: 5 out of 5 stars5/5Crucial Conversations: Tools for Talking When Stakes are High, Third Edition Rating: 4 out of 5 stars4/5Confessions of an Economic Hit Man, 3rd Edition Rating: 5 out of 5 stars5/5Crucial Conversations Tools for Talking When Stakes Are High, Second Edition Rating: 4 out of 5 stars4/5Good to Great: Why Some Companies Make the Leap...And Others Don't Rating: 4 out of 5 stars4/5Robert's Rules of Order: The Original Manual for Assembly Rules, Business Etiquette, and Conduct Rating: 4 out of 5 stars4/5High Conflict: Why We Get Trapped and How We Get Out Rating: 4 out of 5 stars4/5Law of Connection: Lesson 10 from The 21 Irrefutable Laws of Leadership Rating: 4 out of 5 stars4/5Ask for More: 10 Questions to Negotiate Anything Rating: 4 out of 5 stars4/5Summary of J.L. Collins's The Simple Path to Wealth Rating: 5 out of 5 stars5/5The Catalyst: How to Change Anyone's Mind Rating: 4 out of 5 stars4/5Capitalism and Freedom Rating: 4 out of 5 stars4/5Summary of Eve Rodsky's Fair Play Rating: 2 out of 5 stars2/5
Reviews for Closing the Gap
0 ratings0 reviews
Book preview
Closing the Gap - Frank S.D. Alexander
This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.— from a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations.
Copyright © 2007 by
THE NATIONAL UNDERWRITER COMPANY
P.O. Box 14367
Cincinnati, Ohio 45250-0367
All rights reserved.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the publisher.
International Standard Book Number: 978-1-938130-48-9
Library of Congress Control Number: 2007934405
Printed in the United States of America
Table of Contents
About the Author
Introduction
Chapter 1: Underwriting
The Underwriter as Investor
The Insurance Market
Underwriting Discipline and Underwriting Consistency
Underwriting and The Customer
Summary
Chapter 2: Core Underwriting Competencies Technical Skills Knowledge and Abilities
Ability to Select Profitable Commercial Risks
Knowledge and Understanding of Your Company’s Guidelines and Authority Levels
Knowledge and Understanding of Claims Analysis Techniques
Pricing Skills
Account Development and Management Skills
Business Planning and Management Skills
Broker/Agent Development and Management Skills
Portfolio Management Skills
Summary
Chapter 3: Core Underwriting Competencies Non-Technical Skills Knowledge and Abilities
Decision-Making Skills
Negotiation Skills
Selling Skills
Coaching, Mentoring, and Training Skills
Communication and Presentation Skills
Customer Service Skills
Conflict Resolution Skills
Time Management and Organizational Skills
Computer Literacy Skills
Summary
Chapter 4: The Commercial Lines Plan
How the Plan Governs the Underwriting Process
Chapter 5: Leadership
Strategic Plan
Customer and Market Focus
Process Management
Human Resource Focus
Access to Information and Analysis
Communication
Profitable Business Results
Summary
Chapter 6: The Broker as Primary Underwriter
There is Only One Customer
Visit the Customer
Risking Shareholder Capital
Roles and Responsibilities – Strategic
Roles and Responsibilities – Customer & Market Focus
Roles and Responsibilities – Process Management
Roles and Responsibilities – Human Resource Focus
Roles and Responsibilities – Access to Information and Analysis
Roles and Responsibilities – Communication
Roles and Responsibilities – Profitable Business Results
Roles and Responsibilities – Underwriting
Roles and Responsibilities – Customer Knowledge & Customer Value Added
Roles and Responsibilities – Exposure Analysis & Profitability Safeguards
Roles and Responsibilities – Benchmark Pricing
Roles and Responsibilities – Authority, Capacity & Capital Assignment
Roles and Responsibilities – Product Quality
Roles and Responsibilities – Profitable Business Results
Summary
Chapter 7: The Gap Analysis Concept
Lessons Learned from Risks, Claims Large and Small
Summary
Chapter 8: A Model to Bridge the Gap
Customer Knowledge and Customer Value Added
Exposure Analysis and Profitability Safeguards
Benchmark Pricing
The Pricing Process
Authority, Capacity, and Capital Assignment
Product Quality
Profitable Business Results
Summary
The Mechanics
Gap Analysis Spreadsheet
Chapter 9: Practical Use of the Model
The Submission
Summary of First Run-Through
Beginning to Close the Gaps
Summary of Second Run-Through
Closing Gaps from Broker’s Response
The Quotation – Closing More Gaps
The Binder of Insurance
The New Policy – Closing the Gaps Once More
File Documentation
Summary
Examples and Appendices
Example 1
Example 2
Example 3
Example 4
Example 5
Example 6
Appendix A
Appendix B
Appendix C
The examples used in Chapter 9 and Appendix A, B, and C are presented here. These documents are also available online. Go to: nationalunderwriterpc.nuco.com/closingthegap. Enter password: Analyzing
.
About the Author
Frank Alexander, B.A., M.Ed., A.I.I.C. is a Commercial Lines Training Consultant. His work in insurance spans over 30 years and has allowed him to conduct workshops throughout Canada, from Halifax to Vancouver.
Frank has been an Underwriter, Commercial Lines Manager, Quality Manager and Regional Manager. He brings both a Strategic and Profit orientation to Commercial Lines Underwriting.
He holds a Masters Degree in Education from The Ontario Institute for Studies in Education and The University of Toronto.
He has done executive studies at The Kellogg School of Business at Northwestern University in Chicago.
He is an Associate of The Insurance Institute of Canada, and has taught insurance courses for the institute, as well as through Seneca College.
Frank has served as a School Board Trustee. He is a motivational speaker on a wide range of topics including:
• Leadership
• Strategic and Operational Planning
• Career Planning and Life Skills Development.
Frank can be contacted at franksda@hotmail.com.
Introduction
This book is written by an underwriter, for underwriters. Its purpose is to give junior and intermediate underwriters an underwriting tool to help them develop and maintain underwriting discipline.
Rather than take the traditional route used in addressing the concept and process of underwriting, it breaks rank and takes a different view of underwriting.
It is written on the assumption that you come to the work with some experience and knowledge of underwriting, that you have taken the requisite courses, that you understand wordings and coverage, and that you bring all of that background knowledge to the text.
The book therefore deals extensively with the how
of underwriting, in other words the practical, day-to-day application of the body of knowledge you bring to the process. The early chapters look at underwriting through the eyes of the company underwriter. The final chapters provide a gap analysis method for underwriting.
The book is organized as follows:
• Chapter 1 introduces an enhanced view of the role of the underwriter. It sets the market context in which the underwriter operates. It addresses the underwriting discipline and underwriting consistency needed to function successfully in all market conditions, and sets the stage for an understanding of what it takes to be a good underwriter.
• Chapters 2 & 3 deal with the core technical and non-technical skills, knowledge and behaviors a good underwriter should possess. Chapter 2 deals with the technical and Chapter 3 the non-technical. Each chapter takes the relevant competency, deals with its importance, and later, in Appendix A, summarizes those skills and competencies in a gap analysis format. This format thereby allows you to use the text as your personal workbook to improve your own skills and knowledge. At the end of the text, in Appendix B, you are provided with sources of information to help you improve your skills. Spaces are deliberately left in this section to allow you to add your own sources as you build your repertoire of reference material. For easy reference we have numbered the core competencies and structured the reference and other sections of the core competency model to track directly to the numbering system.
• Chapter 4 looks at the need for a commercial lines plan to govern the underwriting process. It gives a brief assessment of how plans come into being and how they affect your conduct on the front lines.
• Chapter 5 gives a brief review of a Strategic Management Model® that is used to create a commercial lines plan.
• Chapter 6 looks at the importance of the broker as primary underwriter. It also outlines the roles and responsibilities of both the broker and company underwriter in the underwriting process.
• Chapter 7 introduces the gap analysis concept. It draws on the author’s experience in his role as an underwriter who has underwritten thousands of risks and reviewed hundreds of claims and many large losses, and it speaks to the lessons learned from those experiences.
• Chapter 8 introduces The Alexander Underwriting Model.® It looks in detail at one approach to underwriting as a gap analysis process. This model is based on the premise that the underwriting process begins with the customer and the development of a thorough understanding of the customer, its operations, its products, and its services. In short, an understanding of the customer’s business. Any gaps in that understanding leads to gaps in all the other Critical Success Areas (CSA) including gaps in understanding of exposures, gaps in pricing, gaps in managing shareholder capital, and gaps in the ultimate price/product/service combination provided to the customer, all of which