What is the role of an UW?
Manage common pool effectively and profitably:
- Assess risk person brings and decide if to accept
- Determine terms and cover
- Calculate suitable premium
What does the UW process assess?
- Major UW factors affecting claims experience
- Average claim per member
- Proposer’s characteristics in comparison with average member
What are the UW considerations for Motor insurance?
- Driver’s age - younger lack risk awareness
- Type and vehicle make
- Use
- Geographical area
- Storage
- Driving record
- Cover / extensions
- Vehicle modifications
What are the UW considerations for Health insurance?
- Occupation - 4/5 classes grouped low to hazardous
- Age
- Family circumstances
- Lifestyle and physical condition eg smoking or obesity
- Medical history
What are the UW considerations for Household - Buildings insurance?
- Construction
- Location - storm, flood, crime
What are the UW considerations for Household - Contents insurance?
- Area
- Occupation during the day
- Security
What are the UW considerations for Travel insurance?
- Destination - USA higher medical expenses
- Purpose and duration
- Group policies
- Pre-existing conditions
What are the UW considerations for Property - Fire and Special Perils insurance?
- Building use
- Goods stored on premises eg paper is combustible, bulk storage
- Construction and material
- Safety features eg sprinklers
- Risk management features
- Number of floors
- Method of heating and lighting
- Location to perils eg flood
All risks same but more consideration premium and terms as cover is wider
What are the UW considerations for Property - theft insurance?
- Trade
- Geographical area
- Moral hazard of owner
- Nature / construction of property
- Theft precautions
What are the UW considerations for Property - Glass insurance?
- Use of building
- Geographical area - vandalism main concern in town centres
What are the UW considerations for Property - Money insurance?
- How much money is handled
- Storage and transport precautions eg sfe
- How employees are paid - large amount of cash on site?
What are the UW considerations for Legal Expenses insurance?
Look at susceptibility of actions through the courts
- Employment criteria - sex and race
- View / actions to health and safety legislation
- Occupation
What are the UW considerations for Business Interruption insurance?
- Can they operate from another premises
- Replacement machinery availability
- Critical machines or interdependency
- Seasonal features
- External dependancies eg suppliers
What are the UW considerations for Extended Warranties insurance?
Not generally underwritten, sold at point of sale
Insurers look at statistics for likelihood of product breaking down
What are the UW considerations for Employer’s Liability insurance?
- Trade / occupation
What are the UW considerations for Public Liability insurance?
- Trade / business and how much contact with the public
What are the UW considerations for Pollution Liability insurance?
- Trade
- Materials used, chemical storage
- Risk control measures
What are the UW considerations for Products Liability insurance?
- Trade
- Final use of the product
- Quality control systems
- Goods exported to USA - litigious society
What are the UW considerations for Professional Indemnity insurance?
- Occupation and professional qualifications
- Experience and degree of moral hazard
How is credit rating used in UW considerations?
Across all lines
Link between propensity and frequency of claim, LR and credit rating
What can fraud look like?
Exaggerating claim costs or deliberately creating an insured event
What does the Insurance Fraud Bureau do?
- Co-ordinate industry wide actions (including policy and insurance companies)
- Public education campaigns
- Operate centres of expertise on fraudsters and methods
What fraud databases are there?
- MIAFTR - details of total loss and theft claims, check to see if vehicle being claimed more than once
- MID
- Claims and Underwriting Exchange - check history of policyholders and eliminate multiple claims
- Art Loss Register - increase recovery rates and deter theft by making resale harder
How do claims handlers pay a role in fraud?
Common indicators:
- Claim soon after renewal or inception
- No documents for lost items
- Several similar claims for similar loss / damage in short period of time
Methods to combat:
- Claims forms over the phone
- Replacement rather than cash
