What are the steps in the insurance underwriting process?

) receiving & filling of the form for  insurance application.

2) gathering all needed information needed to identify the risk exposure before insured.

3) analyzing all gathered informations to calculate the risk based upon the collected data

4) writing the final openion about accepting to what extent with what risk value his application.

5) issuing the policy if approved

Evaluate the risk and they make decision about how much the company should pay for the coverage.

Underwriting is the process of determining whether an insured is an acceptable risk, and if so, at what rate the insured will be accepted. Insurers cannot accept every applicant. An insurer has a responsibility to its current policyholders to make sure that it will be able to meet all the contractual obligations of its existing policies. If the insurance company issues policies on applicants that represent risks that are uninsurable or risks that require premiums higher than the insurer may charge can cover, the insurer’s ability to meet its contractual obligations is jeopardized. On the other hand, a for-profit insurer wants to make money and to increase its number of policyholders. No insurer wants to reject applicants unnecessarily. All these factors must be taken into consideration in the underwriting process. An insurer is also regulated by the states in which it does business. The states expect the insurer to establish reasonable, non-discriminatory standards for accepting insured. Regulation is another important factor in the underwriting process; most of the risks are tariff governed.

Underwriting is all about risk selection. A risk may be good or not so good depending on underwrier's risk taking appetite. If the risk is worth acceptace based on merits of the case, the capacity to write the risk is another factor to reckon with. How much to be kept in net account and how much to be ceded to reinsurer depands upon reinsurance treaties in place. Another important factor which any underwriter would want information on past losses or damages for 5 years preceding period as well as on the moral hazard of the client. Further, some underwriter will also want to know about risk awareness and mitigation measures in place. 

·          Review individual applications/enquiries for insurance to evaluate degree of risk involved and determine acceptance of applications.

·          Providing quotations for various class of business (viz. Fire, General Accident/Liability, Engineering & Marine) on receipt of enquiries / proposal forms from Marketing Personnel, Brokers & Direct Clients after thorough scrutiny.

·          Ensuring competitive quotations are negotiated to enhance business at the same time keeping risks at minimum level.

Underwriting is a scientific process where the Insurance/Reinsurance company selects the risk it is willing to take on its books of account.

The process starts with selection of the risk at the sales stage(The sales person being the primary Underwriter to decide if  the particular risk can be insured with the company, this is followed by filling up of the application form, which is reviewed by the Underwriter,in which the disclosures in the proposal form and the supporting documents are categorized as Standard/Sub standard risks/Unacceptable risk, and the premium is charged/quoted accordingly to the customer, post acceptance of the quote by the customer, the risk is taken on in the books of the Insurance company.

Underwriter will inspect the product to be cover then access the risks and exposure to loss of the product. Based on all these analysis he will arrive at a premium which be given as base premium for the policy.

The Proposal form/Questionnaire duly filled up by the client/company accdg to their insurance requirement.

2.) Undwerwrite the application/proposal form thoroughgly, asked pertinent questions related to the requirement,project, proposed insured and  establish information of the client/company/projects.

3.) Identify various risk  factors on the specific location, or of the project to be insured,property to be insured and the probability of claims.

4.) If the proposed insured is qualified, compute the premium according to the tariff premium,company rates and/or management given rates.

5.) If the customer agrees the premium , issue the policy accordingly as per COVER in respect to the companies standard Policy wordings and UAE Federal Laws.and ensure posting of facultative if re-insurers are required.

Hi

I am presently working at Cogneesol Inc. as an insurance service associate & I am into the core of the insurance underwriting process. The process is simply termed as policy management that covers new business services plus policy renewals. The flow is:

policy submission -> quote creation -> policy creation -> policy binding -> policy issuance -> policy data entry -> policy checking -> policy endorsement -> additional insured -> policy cancellation -> policy reinstatement -> policy renewals.

Thanks.

1/ Proposal form.

2/ survey or survey report to assesst the underwriter to fix the premium rate , excess and conditions which are suitable and fair to the risk that the insurance company asked to ensure.

3/ issuing of the insurance policy.

4/ issuing of the debit note to charge the insurance premium.

4/ registration of the risk and folloqw up.

5/ the underwriter in his job should be very carefull to the reinsurance treaty and always comply with it's terms and conditions and the first thing before issuing of the insurance policy makes sure that the insurance policy's total some insured is not exceeding the treaty limit . If the total sum insured is exceeds the treaty limit the underwriter should find a facultative reinsurance cover to place the surplus amount with reinsurers before finally conveying  acceptance of the the risk to the original insured , however, this step is very important in insurance underwriting.

Kind regards

Risk assessment

Technical pricing of the risk

Providing formal quotation to broker/customer