Underwriting profits in the insurance industry have been flagging in recent years, as a soft market has led insurers to vie for business by lowering premium rates. Allianz believes underwriting skills have also suffered and has launched its new insurance college in a bid to buck the trend.
The vision is twofold: to build on technical skills of underwriters to better meet customer demand and to attract and retain the best staff.
Andrew Torrance, general manager of Allianz Cornhill, says of the academy: “We want our underwriters to be the most skilled in the marketplace and we aim to be the employer of choice in the industry.”
Torrance believes underwriting skills have fallen down the industry's agenda in recent years, as insurers have had other priorities during a period of rapid consolidation.
Chris Hanks, who heads up Allianz Cornhill Regional, agrees that standards have fallen across the market and a number of experienced employees have been lost by cutting budgets and expenses.
But Hanks has high hopes that that the new underwriting college will help to improve skills, by making sure that underwriters know about risks, down to fine details such as fire apparatus and anti-theft alarms.
“At present, there are a limited number of technical people who can price products,” he says. “We aim to equip underwriters at the point of risk acceptance, as by nature we are a risk-taking company.”
Plugging the skills gap
Like many other insurers in the market, Allianz Cornhill has experienced difficulties in recruiting graduates and career underwriters to fill positions.
Human resources executive Phillip Gennoy says: “The market is not flushed with a pool of good underwriters – they are in very high demand. The college will help to improve the flow of employees by training and promoting from within.”
The courses are linked to the Chartered Insurance Institute (CII), which helps to attract graduates.
Each underwriter has a continual professional development record, called a Performance and Development Appraisal System (PDAS) which is monitored by the CII, even at senior levels. The response from graduates has been positive, as each employee has a clear career path with regular reviews.
In addition, Allianz Cornhill undertakes a lot of promotion and marketing from fairs and milk rounds to targeted newspaper advertisements, in order to recruit graduates. Gennoy says that Allianz Cornhill is aiming to dispel the traditional image of insurance as being a “grey suit” industry.
Investment in people
At Cornhill Manor, the existing underwriting college near Guildford in Surrey, groups are kept to a maximum of 12. This ensures the employees' level of interest is kept up and also gives them the opportunity to share anecdotes and ask questions.
Each of the four levels of training which take place at the underwriting college have a series of modules.
Level one involves multiple skills, using a range of self-learning modules, such as CD-Roms. At the next level, employees become more responsible for their own career development. There are workplace modules, backed up with courses to consolidate learning. The first two levels are supplemented by the attainment of professional qualifications.
By the time underwriters reach levels three and four, they become more specialised and the method of learning moves away from courses and more towards conferences.
Courses at the first three levels are divided into commercial property and casualty, commercial motor, personal insurance and speciality commercial. The most senior underwriters learn about market awareness, knowledge transfer skills, technical skills and account management.
In addition to the courses, provision is made for secondments, lectures at the CII and network groups and workshops. Also, as an incentive, employees receive a cash reward for passing examinations.
Each year, every underwriter will spend ten days a year in training – five will be done in the office and five at Cornhill Manor. Six underwriting and human resources specialists are now employed full-time at the academy, focusing on both individual development and group training.
The courses cover traditional underwriting training, but also include topical issues, such as the 4th Underwriting Motor Directive, to keep underwriters up to speed on the latest changes in the market.
At level four of the training programme, employees can travel to Allianz's headquarters in Germany and to the US for on-the-job training, to get a grounding in global risks and to share information on a global basis. Underwriters from Allianz Germany also travel to the UK to speak at conferences.
The academy provides the opportunity for people to communicate between regions which carry very different levels of risk and allows underwriters in the regions to write greater risks.
Gennoy says: “The aim is for employees to develop as far as they can and maximise their long-term potential. The college will help to keep them up to speed in what is a dynamic and fast-moving industry.”
Layout of courses
The company's plan is to improve its underwriting ratios to 102/103.
Torrance says: “We are coming from a situation in which our performance is similar to other insurers. If we can build a couple of points, that is an extra £22m.”
This year, more than £1m will be spent on training over 400 underwriters and the company plans to maintain this level of investment in the future. In the past 12 months, Allianz Cornhill has added 63 new underwriters to its team, and is looking to add a further 25 this year.
Looking forward, the layout of the training programmes is far from stagnant and will be re-assessed each year and updated to address the salient issues of the day.
It remains to be seen whether Allianz Cornhill's goal of attaining healthier results will be met, but it is certain that its underwriters will be given a solid grounding to improve underwriting standards.