Multitasking is an efficient means to achieve underwriting profit. Anthony Broome explains

Today's liability insurance buyers, assisted by their brokers, need answers to some difficult questions; does the underwriter properly understand our business?

Does the buyer realise how modern technology has transformed our trade? Will he fully appreciate the work we have done to eliminate and reduce risk?

Will he be able to suggest practical ways by which we can further improve? Will our premiums reflect the individual nature and characteristics of my business? Will he be fooled by smoke and mirrors or recognise the real deal?

So today's liability underwriter is faced with a complex conundrum; what are the physical hazards presented by the type of risk?

What are the latency prospects for disease and damage? What is the extent of the legal exposure for the trade? How has the risk performed historically?

Is the business growing or shrinking? What is the firm's approach to health & safety and risk management?

Flattering performanc
Throughout the 1980s and 1990s liability underwriters were unable to make an underwriting profit and relied on investment income to prop up their figures, flatter performance and, in truth, paid lip service to the enforcement of robust risk management.

Recent years have seen backbone return, rates stiffen and policy terms and conditions harden. Employers' liability rates from the buyers' point of view, "went through the roof".

As a result, there was a clamour for health and safety compliance and risk management to be properly acknowledged by underwriters looking at selection and pricing. Indeed this was a feature of the government's response to the crisis.

So now, risk presentations have became ever more complex with brokers keen to let underwriters know every aspect of their clients' health and safety and risk management programmes.

While this approach is to be welcomed, standards vary widely. Some brokers are able to supply surveys from their own 'in house' consultancy, others rely on peppering the underwriters with every bit of documentation they feel is pertinent.

For the underwriter, the question is what does it all mean?

We at DA Constable Syndicate 386 utilise our own approved service providers to survey risks on our behalf to obtain a balanced view.

Currently about 50% of our primary account is surveyed and provided with risk management advice. However, we realised that this was not enough. To be fully effective, meet our clients needs and achieve the desired underwriting margins we, the underwriters, need to be competent in thoroughly understanding the complexities and subtleties within the information we receive.

Professional qualificatio
We also need to be able to speak with confidence with surveyors and our clients' risk managers. We need to inspire their confidence by obtaining the same level of professional qualification and be able to network with comfort within the risk management world.

That's why in addition to the CII exams, as part of their personal development plan, our underwriters are encouraged to seek professional qualifications that would usually only be considered by occupational health and safety specialists, liability surveyors, risk consultants and the like.

We have underwriters with a broad spread of qualifications, including the National Examination Board in Occupational Safety and Health (Nebosh) Certificate and Diploma, Vocational Level 4 and degree standard.

This provides us with a wide range of skill and expertise at different levels, which are further recognised by individuals gaining membership to the Institute of Risk Management, the International Institute of Risk and Safety Management at both Associate and full Member categories, and the Institute of Occupational Safety and Health.

As underwriters, we need to send out signals that we are fully committed to understanding our clients' business risks. Multi-tasking isn't a gimmick, it's an efficient means to achieve underwriting profit and client satisfaction.

Some firms think that they have covered everything once they have put in place a basic structure by establishing a policy statement, some procedures and maybe some generic risk assessments.

In real terms they haven't even started. Risk assessments need to be produced for just about anything that presents a risk of injury or damage to health.

Also a plan to implement and measure performance is essential with a continuous procedure of auditing and reviewing what they have achieved.

As underwriters we are always looking to expand our knowledge of systems and products that can help our insureds to reduce or eliminate risks. Through our own research we ensure we are always up to date with developments.

This approach comes into its own when we visit our insureds and their risk managers and have the opportunity to discuss the problems they face on a daily basis.

These problems will be many and varied. For example, we recently visited one of our insureds who was experiencing problems with the effective management of personal protective equipment (PPE) within the workforce.

Only a matter of weeks before this, I had attended a health and safety exhibition where I came across a new PPE vending machine that had just been launched in the UK.

Each employee would be issued with a card to access the machine for the appropriate protective equipment. The machine links up to a network that records who has taken what and when.

It can also be used as a warning system that notifies management if someone who should be using PPE isn't doing so. That knowledge solved the problem.

Accurate pricin
So how do brokers benefit from underwriters multitasking? It means they can explain with certainty that the underwriter fully understands the risk profile and will recognise its quality.

It should give them confidence that by using knowledgeable and professionally qualified underwriters they will ensure competitive and accurate pricing.

They will also benefit from a second opinion, when they are submitting surveys and recommendations produced by their in-house colleagues.

More importantly, they will feel comfortable with the underwriters they put before their clients. A multitasking underwriter will make the broker look good. Standards are also raised. Tick box applications and confirmation that the client has merely met his legal obligations won't impress the underwriter.

But when the underwriter is truly impressed with the quality of risk, he will do everything possible to retain it permanently. Multitasking ensures that relationships can be built around risk improvement and management. A bonus for both insurer and broker. IT

' Antony Broome is director of DA Constable Syndicate