Insurance Journal (3rd Quarter 2020)

Guest Contribution
loss costs. Then each insurer
examines its own operational profit
and expense requirements. Staff
underwriter combine prospective loss
costs with an insurer developed profit
and expenses loading to create a final
rate used in policy pricing.
Arrange Treaty Reinsurance
Staff underwriters are responsible for
securing and maintaining treaty
reinsurance. Their responsibilities
include determining the insurer needs
for reinsurance, selecting reinsurers,
negotiating the terms and conditions
o f r e i n s u r a n c e t r e a t i e s , a n d
maintaining the insurer relations with
its treaty reinsurers.
Treaty reinsurance limitations are
d i r e c t l y r e f l e c t e d i n t h e i r
underwriting guidelines. For example
Staff underwriters specify in the
u n d e r w r i t i n g g u i d e l i n e s t h e
maximum coverage limits that can be
offered because higher limits of treaty
reinsurance were not purchased or
treaty exclude some accounts.
Assist others with Complex Accounts
Staff underwriters often serve as
consultants to other underwriters.
Generally Staff underwriters have
significant first hand line underwriter
experience. They regularly see
complex and typically accounts,
unlike most line underwriters. Staff
underwriters also functions as
Referral underwriters that is when an
application exceed a line underwriter
authority a referral underwriter can
review and approve the risks.
Conduct underwriting Audits
Staff underwriters often responsible
for monitoring line underwriter
a c t i v i t i e s a n d a d h e r e n c e t o
underwriting authority by conducting
underwriting audits. The audit focus
on proper documentation adherence
to procedure, classification, and
rating practices; and conformity of
s e l e c t i o n d e c i s i o n s t o t h e
underwriting guide.
Staff underwriters also monitor
underwriting activity by analyzing
statistical results by type of insurance,
class of business, size of loss
exposure and territory.
Participate in industry Associations
Many insurers are members of
national and state associations that
address insurance industry concerns.
Additionally, insurers often share in
the operating of residual market
mechanism, such as automobile joint
underwriting associations and
windstorm pools. Staff underwriters
typically represent the insurer as a
member of these organizations. Staff
underwriters may also serve on an
advisory organization committees
that study standard policy forms and
recommend changes.
Conduct Education and Training
Staff underwriters are usually
responsible for determining the
education and training needs of line
underwriters. Sometimes, these
training needs are addressed through
a formal training program that all
newly hired underwriters must
complete. At other times, the training
need is transitory and is provided
through classes that address a specific
underwriting issues or procedure.
Some training needs are met through
programs provided by the insurers
human resources department.
However staff underwriters often
develop courses and serve as
instructors in technical insurance
subjects.
Insurance Journal July, August, September 2020
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