Insurer targets training as key to profitable underwriting
Norwich Union (NU) has pledged its support for Insurance Times' underwriting discipline campaign, arguing that training is key to profitable underwriting.
The insurance giant slammed some of its competitors for "reckless underwriting" and said that underwriting discipline needs to run "throughout a company in terms of their behaviours and governance".
NU director of commercial underwriting Ian Ferguson said: "There is pressure on companies to achieve growth targets. As the market softens, some underwriters panic. It is important that the industry stays calm."
He outlined how the insurer was controlling its underwriting, including:
Ferguson said: "We have been easing off classes where we can see rates becoming unprofitable, for example fleet, and are seeing rates recover as a result. Fleet is a class that needs most action. It tends to lead the market down."
Ferguson admitted that the company was not "perfect" and "every big company takes bad decisions". He said: "Our underwriters have outperformed the market. Our strategy is that front line underwriters know what they can accept. While more sophisticated underwriting models can help, the most important is training."
He also responded to criticism that NU's regional offices competed against each other driving rates down.
"We do not encourage internal cannibalisation. We have a database to prevent this happening."