Insurance underwriter helping a client with data

Why You Should Work with an Underwriter

Why You Should Work with an Underwriter

April 30th, 2018 by Mike Viola

Insurance underwriting is the process of assessing the risk associated with a proposed insurance policy. Many factors go into determining risk, and whether a corporation is insurable. Underwriters determine the premiums needed to accept the proposed insurance policy. They only decide these premiums if they deem the circumstances are acceptable.

Insurance underwriting can be confusing, but it’s critical that brokers understand it as well. It can help them understand the required premiums to accept the risk of ensuring a corporation.

Why Should a Broker Work with an Underwriter?

Brokers work with underwriters because they help prevent potential losses. Underwriters can agree to insure a company with exclusions based on the potential risks associated with a particular case. Underwriting offers protection and clarity, so brokers can do their jobs.

Clarity is especially important when it comes to specialty niche cases. When working with an underwriter, the broker feels like they have an additional hand in processing cases and making sure the insurance company is profitable.

Determining Policy Coverage

Underwriting help brokers outline the specifics of policy coverage. They can make exclusions in a proposed policy based on their assessment of potential risks. This allows brokers to offer necessary insurance to clients without assuming a higher likelihood of losses. This is especially important when working with specialty insurance such as: scaffolding, crane, rental equipment, and cyber liability.

Determine Possible Risk

It’s tough for brokers to understand the potential risks associated with each proposed insurance policy without an underwriter. They’re trained to look at each of the factors associated with the person or circumstance in question and can outline the potential for loss. They’re able to use the underwriting process and their decision-making skills to assess individual claims and see at what premiums they’ll continue to be offered or how much a company stands to lose or gain from a potential client.

Reduce Future Risks

Not only can insurance underwriters assess current potential risk, but they can also assess future risk for policy renewal. This determines the future cost of premiums at the renewal period. Underwriters provide guidelines that help brokers provide the insurance to their customers need.

Specialty Cases

It’s essential for brokers to understand insurance underwriting, especially when it comes to specialty cases. Having trained, professional underwriters on your side, protects your insurance company.

According to the Insurance Information Institute, in 2016 there was $523.5 billion in premiums earned by insurance companies with losses of $318 billion. The net income after taxes was $42 billion. Without insurance underwriters, that net income would be greatly reduced.

Underwriting plays a key role in helping brokers assume risks and continue to thrive. For more information about insurance underwriting, contact Ascinsure. We’re underwriting experts who can help you assess policies for specialty cases. Speak with one of our experienced team members and start outlining potential risks today.

Legal Disclaimer regarding content: This document/communication/message and its content is to be used only for general reference purposes. It summarizes certain publicly available information about the subject, but it is not legal advice, and Ascinsure disclaims any representation or warranty that the materials contained herein are complete and/or accurate. Ascinsure is not a law firm or accounting firm, and does not provide legal or accounting advice; you should engage your own lawyer or accountant if you have questions about these materials. Ascinsure does not deem this information and any attached or linked documents as a complete and thorough listing or overview of the topic, and does not recommend it be primarily relied upon. It only highlights some common issues and resolutions.

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