Insurance Underwriter.
The insurance underwriters are skillful persons who do the tough job of reviewing the insurance and other related applications. They have to identify the risk taken by the company while it insures any property. They have to anlayse this risk by gathering information from various sources and write policies to manage it. These applications are accepted or rejected under some basic criteria of individual companies.
An underwriter has to meet the policyholders, brokers, agents and mangers on a daily basis. The underwriters work to create a pool of insured whose actual loss will approximately be the expected loss of a given theoretical pool of insured. So they work to find exposure whose specifications match the theoretical pool. Their final goal is to bring the actual and the expected loss very close and find the best policies accordingly. If the underwriter finds it risky and rejects many applications, then the insurer suffers a loss.
Nowadays insurance companies use computerised systems to check the applications and make the underwriter’s job easy. These applications help to complete the work in a short time and will provide reliable and accurate results. They analyse, rate the application and also recommend whether or not to accept the risk. The system adjusts the premium to make the risk acceptable. Through these systems, underwriters can also analyse reports of losses and actuarial studies, reports on chances of insurance loss.
All insurance policies contain details about the types of losses covered. Insurance underwriters can specify a supplementary uncovered item known as exclusion. This means that if any loss occurs due to this exclusion, then the insurance company is not obliged to pay. The underwriters should see if any adverse selection or anti-selection does not affect an application. Anti- selection does not give the actual cost of the exposure while giving the average rate. If an underwriter does not analyse an application properly, the actual loss can go well above the expected loss. Underwriting skills are acquired from many years of experience and judgment.
Describe the role of an insurance underwriter.
Reviewed by enakta13
on
October 12, 2019
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