Aligning the corporate insurance buyer’s needs with those of the underwriters
By Andre Pienaar – Lead Underwriter of PLUM, a corporate underwriting manager underwritten by Infiniti Insurance Limited, and Paul Hancock, General Manager of Infiniti Insurance Limited
“The landscape of the South African Corporate Insurance industry has changed over the past 25 years or more”, says Andre Pienaar of PLUM. This does not only include changes in the key players and stakeholders, but more so in the way that risk is managed, and how clients understand risk. He goes on to say that, “Any successful corporate underwriter will admit that their underwriting careers have, in the past, been somewhat based on trial and error, however they will also admit that there are certain vital underwriting principles that they would not deviate from. These principals are ingrained into corporate underwriters and form the pillars of successful underwriting as well as the clients understanding of risk and the ramifications thereof.”
Risk management is at the forefront of risk assessments, and whilst premium still seems to be a significant talking point of any program, the principle of taking increased risk via higher deductibles and self-insurance programmes is gaining increased traction and becoming increasingly more important than merely focussing on pricing. With this said, the application and balance of the validity of these principals cannot be entered into without the key factors of sound relationships, knowledge and perspective.
Underwriters and brokers need to have relationships that are based on the fundamental premise of a client centric business model. The client is first and foremost. However, one must always factor into this equation the Insurer and the Reinsurers that sit tucked away behind it all and how any risk affects them. Paul Hancock, the Head of the specialist division of Infiniti Insurance comments, “The perspective of the Insurer and Reinsurer has traditionally been from a net underwriting profit perspective but is increasingly being considered in light of solvency requirements. Insurers and Reinsurers have benefitted in times of good underwriting results but have also experienced times of very poor underwriting results due to general market conditions and poor risk selection.”
“The seasoned corporate underwriter will understand the client’s needs, through the relationship he/she has with the broker. It is essential to have a sound understanding and knowledge of the client’s attitude and ability to better manage risk, through CAPEX and Risk Management implementation measures, as well as the premium pay-away affordability position of the client in relation to this and his deductible and self-insurance payment affordability,” says Hancock.
The underwriter would have an attitude of working with the broker and client in finding a unique and tailored underwriting solution that will enhance the acceptability of the risk to the benefit of all parties concerned. There should never be an attitude of punishment or penalty but rather one of knowing the ability of ones’ client to continually become a more suitable risk to underwrite. If the relationship is not at a level of trust during the underwriting process, then the relationship will certainly be flawed come claim time, bringing more complications to settlement and will most likely terminate at renewal if not sooner. The seasoned underwriter should know from the outset if the perspective from all vested parties is aligned or not and that if a policy is entered into, what the expected outcome may be.
The underwriter needs to have a thorough perspective of their clients’ three to five year business plan, and be able to align their underwriting application strategies around their clients’ abilities and needs. This can only be achieved by the relationship that they have with the broker who likewise should have the ability to act as the bridge for the underwriter and the client.
“Any risk relationship should always have the purpose of longevity for the pure reason that we as underwriters are in the business of paying our clients insured losses and should be there for the good and bad times alike. Underwriters should be understanding if a client has one bad loss year, but a seasoned underwriter remains pro-active in trying to find the reasons behind the loss experience, be it volatility or frequency. They should try and gain perspective into their clients’ risk by finding out where and what factors may be driving losses,” says Pienaar.
Although there will always be a requirement for the presence of the basic principles that have stood the test of time when looking at writing any risk, there has to be a level of creativity and innovation for any corporate insurance transaction to be aligned with the clients’, underwriters and other stakeholders needs and requirements. In the eyes of Andre Pienaar, the lead underwriter for PLUM, Infiniti’s new corporate UMA, the key ingredients that glue all of it together are sound relationships, knowledge and perspective.
Infiniti Insurance Ltd
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