Summary of this plan

This business plan and our efforts to implement it will enable XYZ Insurance Company front-line employees (CSRs) and desk underwriters to learn, plan, and succeed at serving their customers and improving XYZ Insurance Company's underwriting performance* in 2006. Desk underwriters, managers, and executives will work to support team leaders (e.g., agency and regional managers). Team leaders will enable front-line employees to succeed at growing our book of business profitably.

How we work our plan

We will plan our work and work our plan as a team playbook. It should be used by teammates to:

1.       Explain principles, processes, powers, and purposes (goals & objectives).

2.       Develop ways to underwrite more profitably and increase our policies-in-force "PIF" counts while being compliant with principles of indemnity and states' regulations.

3.      List and describe steps used in each of our work processes.

4.       Illustrate how each process and its associated principles can be used on the job to succeed.

5.       Ask for feedback from CSRs, insureds, and former insureds on how each process is applied so we can learn what results are produced for our customers.

6.      Track improvisational adjustments to our processes to learn when variation from our formal procedures** is and is not appropriate.

Scope of our plan

This plan has a limited scope. It does not answer questions such as:

q       What is our lobbying strategy?

q       What is our pricing strategy?

q       How to should DOI complaints be handled?

q       What procedures should be used for quality auditing?

q       How can CSRs be trained to increase their sales-to-quotes ratio?

q       How should reinsurance treaties be negotiated?

These questions are not directly related to eligibility and acceptability of applicants, exposures, etc.

Purpose of this plan

This business plan will serve as a playbook for our team. Use of this team playbook will help us set goals and reach objectives in coordinated ways (e.g., our underwriting efforts will help us achieve XYZ Insurance Company' marketing objectives, our front-line underwriting will increase customer satisfaction and reduce claims for undisclosed household drivers).

The principles and processes described and illustrated here will help everyone understand each other and work together in coordinated ways to increase XYZ Insurance Company's profitability and PIF counts. This is a set of documents that describe, diagram, and demonstrate a systematic and systemic* approach to improving how XYZ Insurance Company's employees work together to be faster, better, and cheaper than the competition. Relationships between insureds, CSRs, desk underwriters, and management are described in ways that facilitate building trust and abilities. Tools and techniques are described here to help reconcile opposing views. Principles are used in processes we have built in ways that are aligned with our values and produce the results we want to achieve.

We are working to make sure this plan answers the following questions persuasively:

q       Will reading this plan give underwriters and CSRs a clear understanding of what XYZ Insurance Company's Underwriting Department is trying to achieve and why it does what it does?

q       Will underwriters be enthusiastic about their team's goals?

q       Will underwriters see how their tasks contribute to achieving your plan's goals?

q       Will underwriters be able to do their work so well that they will feel satisfied with what they have accomplished each week?

q       Will the plan enable underwriters to achieve their professional goals?

q       Will the plan help underwriters trust each other?

q       Will the plan help Senior Underwriters foster open communication that is respectful of differing opinions and results in new and better ideas?

q       Will the plan help underwriters hold each other accountable for results?

q       What seasonal adjustments to work schedules should be planned?

q       What options should be used in contingency plans?

Realism of this plan

Critics may claim this plan requires unrealistic levels of trust and understanding by all stakeholders. However, desk underwriters and front-line personnel can work together just like construction general contractors and sub-contractors work together on building projects.

All of our stakeholders can participate creating win/win agreements based upon communication of mostly objective information during and after ongoing negotiation sessions. Therefore, vague promises will be replaced by specific commitments with necessary details and our performance will be measured* objectively. Uncertainty and unpleasant surprises will be replaced by confidence, reliability, and greater profitability. The information and vision communicated in this playbook and the underwriters' individual performance plans will be our sources of sanity in our crazy world.

Increased consumer confidence in XYZ Insurance Company's insurance products, improved reliability in XYZ Insurance Company's people and processes, along with increased underwriting profitability will draw insureds, employees, and investors to XYZ Insurance Company. These qualities will also encourage regulators to cooperate with us when we open new markets and implement changes in existing markets.

Implementation of this plan

As of May 11, 2005, implementation of this plan is pending approval by XYZ Insurance Company's CEO.The following actions were initiated to begin laying a foundation for implementation of the plan:

q       The Underwriting Manager began modifying his business plan template to reflect the unique characteristics of XYZ Insurance Company in January of '05.

q       One-on-one monitoring of each employee has begun in an effort to give immediate feedback concerning what they are doing well, learn what they want to improve, and what their weaknesses are.

q       A strengths, weaknesses, opportunities, and threats "SWOT" analysis has begun*. Much of which comes from our Compliance Officer's research, GRe-Insurance Company's underwriting and claims audits, states' market conduct examination reports, and DOI complaints.

q       Five underwriters have been invited to become subject matter experts "SMEs" concerning one or more of their job functions so they can inform and coach their peers during team meetings and at employees' desks.

Ÿ      Sammy Terger is our Renewal Study List SME.

Ÿ      Kelly Saker is our Exception Underwriting SME.

Ÿ      Tim McLoud is our Risk Alerts Underwriting SME.

Ÿ      Ike Mery is developing a program for diagnosing and remedying agencies' profitability problems.

Ÿ      Alexia Roland is teaching an evening class enabling underwriters to work toward achieving their employers' marketing objectives.

Ÿ      Sammy Terger developed an in-force underwriting process to react to insureds who have relevant incidents in their first 60 days (our discovery period) of coverage.

q       Negotiations are being conducted for resolution of complaints by CSRs against underwriters in an effort to learn CSRs' concerns and bridge underwriters' performance gaps.

q       Insureds' complaints are being resolved and used to develop case studies, as a part of the process described on the next page, for training our team.

q       As problems arise and opportunities to communicate present themselves, the Underwriting Manager is working with teammates to develop segments of this plan.

People tend to maintain what they create; therefore, the Underwriting Manager has worked with the team to create much of their playbook. The team has been encouraged to create what is relevant, realistic, and right in their minds so they can be more correct, consistent, quick, confident, and comfortable. This will then encourage team members to want to use their playbook and improve it.

Implementation of this plan (continued)

On February 14, 2005 the following process was introduced to XYZ Insurance Company's underwriters. They were asked to use this process to learn what happened to cause each complaint, learn what should have happened to assure customer satisfaction, take remedial actions as soon as possible, and teach the team to avoid similar problems. Underwriters are asked to use the following process to take corrective action when work is not done properly.

1st.       Learn - Research what our procedure* documentation states.

2nd.    Evaluate - Compare and contrast what is learned with what was done.

3rd.     Collaborate - Briefly verify with your peers what you are experiencing and wanting to propose.

4th.      Remedy - Take action to fix the problem and begin regaining the customer’s confidence.

5th.      Plan - Recognize what should be done to prevent the same error by other underwriters or CSRs.

6th.      Train - Teach other underwriters in the next team meeting (if the issue can wait that long) or a.s.a.p.

Objectives to achieve

Here are our five primary objectives. Specific goals are described afterwards for each objective later in this plan. These objectives are not listed in order of their importance. Descriptions of goals and statements of objectives will enable us to plan how to implement strategies and accomplish our mission*.

q       Our team will create a team playbook we want to implement, improve, and maintain as we grow in size and success. We are a learning organization and what we learn will be reflected in our playbook.

q       XYZ Insurance Company's home office underwriting team (composed of six desk underwriters doing exception underwriting as of November 11, 2004) and a supervisor (Dana Bourge as team leader) will improve how it does exception underwriting and underwriting of their agencies' books of business (see portfolio management underwriting on pages 42 - 43). We call these employees exception underwriters, informally, to differentiate them from our front-line underwriters (CSRs) who do not do exception underwriting.

q       XYZ Insurance Company's CSRs will improve how they do our front-line underwriting.

q       Our computer system's decision-making ability will be improved as the Underwriting Manager receives approvals for changes from our CEO.

q       After our implementation of this plan has shown at least five significant, measurable, and favorable impacts, we want to begin renegotiating with our vendors so we secure more favorable terms and generate more win/win agreements with regulators and firms such as our re-insurer, GRE-INSURANCE, as well as firms who supply us with underwriting reports (e.g., CLUEs, MVRs).

As described on page 4, our team has been asked to develop segments of this team playbook so it can be used as a set of plans. This will encourage them to make sure their segments are realistic and supported by XYZ Insurance Company's management team and other departments. What they do not develop, the Underwriting Manager will introduce and explain to them as opportunities arise so they become acquainted with the team playbook's parts and give suggestions for improvements. Our team will approve our playbook or improve it so it can be implemented gradually during 2006.

Goals to reach

Achieving the daily, weekly, and monthly goals, described later in the report, will help us reach these goals. Our major goals are described here in a way that parallels the objectives on the previous page.

q       Business plan - We will follow our plan, using it as a team playbook. It will be improved in ways that enable us to support achievement of our internal customer goals such as being available when CSRs need us and helping to improve the quality of our front-line underwriting.

q       Underwriting decisions - We will standardize how underwriting is done by employees so we are able to perform more efficiently as our workloads increase and be more consistent in the eyes of our CSRs. This will increase how effective we are at lowering our loss ratio.

q       Marketing objectives - We will monitor XYZ Insurance Company's marketing efforts to learn how to improve our underwriting guidelines and processes so we are more effective at increasing our PIF counts and profitability.

q       Front-line underwriting - We will facilitate improvements in how CSRs underwrite applications and endorsements.

q       Underwriter system - We will increase the usefulness of our computer system so it makes more decisions to add more insureds profitably.

q       Administrative support - We will improve how well we work with states’ regulatory authorities and industry vendors as we become more successful and influential.

Definitions of terms

The word team is used in this context to mean all those who work at XYZ Insurance Company as CSRs and desk underwriters, as well as their supervisors, managers, and support staff.The phrase " stakeholders" is used to mean all parties interested in the team's efforts to issue, renew, rewrite, or cancel policy coverages.

Underwriting is the process of gathering of information, analyzing relevant risk factors, making decisions about what is relevant, and determining what actions should be taken to manage risk. We believe it is a science* not an art.

Exception underwriting is what we do when applications and renewing policies are referred for consideration of exceptions to underwriting guidelines.Most exception underwriting is:

q       Performed in response to an application or renewal being referred by customer service representatives due to unacceptable condition(s),   Performed in an effort to find mitigating circumstances so an exception to formal underwriting guidelines can be offered,

q       Conducted in an effort to respond to concerns raised by formal underwriting guidelines, and  

q       Accomplished by building a chain of logic that informs stakeholders and persuades interested parties to agree on a proposed action plan or make realistic counter offers.

See pages 17 and 18 for more information about exception underwriting.

Front-line underwriting is what customer service representatives do when they complete applications on our computer system.ront-line underwriting is the work performed when CSRs gather information, application information is evaluated by our Underwriter software, and a decision to quote or reject the applicant is made by our computer system.

Portfolio underwriting is explained on pages 42 and 43.  

Guidelines to follow

We are planning to improve the quality of our work. Here are our interpretations of Dr. W. Edward Deming's 14 points for doing quality work. These are ideals to use as guidelines and goals while our agencies and our underwriting team plan to transition from wherever they are to where they need to be. These can be used from initial startup to growing profitable books of business to branching out geographically and adding lines of business.

q       Create a constancy of purpose. Project a unified coordinated image during meetings, in newsletters, in correspondence, everywhere. Follow a plan everyone can share.

q       Develop a written philosophy with guidelines all stakeholders understand and support. Use diagrams, matrices, and case studies to demonstrate how work should be done.

q       End dependence on inspection/audits to achieve quality. Develop best practice processes for each job function and support their implementation thoroughly. Adherence to good processes will produce good results.

q       Stop purchasing the lowest priced supplies and services. Minimize overall cost with an eye toward measuring the quality of the purchase. Where is V the highest in the value formula*?

q       Encourage continuous improvement of your systems and methods of management so people's work will improve.

q       Institute training on the job by subject matter experts who have been trained to develop instructional material and then facilitate learning during brief lessons.

q       Adopt and institute leadership, not traditional management. Focus on doing the right things more than just doing things right.

q       Drive out fear by increasing trust, confidence, and loyalty.

q       Break down barriers between staff areas and departments.

q       Do not use slogans, exhortations, or targets for employees.

q       Stop using production quotas, as required by Management by Objective "MBO".   Start measuring adherence to approved processes and customer satisfaction indicators.

q       Give people credit for good workmanship frequently. Stop humiliating employees with performance reviews.

q       Institute a vigorous program of education and self-improvement for everyone.

q       Work at improving the quality of your work now.

Introduction to our work

We are working to create and maintain a comprehensive underwriting strategy* for providing XYZ Insurance Company's insureds the best possible service and insurance coverage. Our work will reflect thorough analysis and strategic planning. We will analyze each region's past:

q       financial performance,

q       market segmentation and activity, and

q       regulatory, legislative, and judicial climates.

Alexia Roland and Ike Mery have been asked to create a list of questions to be submitted to our marketing department. The Associate in Personal Insurance courses they took should help them facilitate our learning how we can support achieving XYZ Insurance Company's marketing objectives.
Alexia began teaching the API 28 course in March. We are hoping to have one or more guest speakers who are SMEs during classes.

We will plan our efforts to:

q       coordinate actuary, underwriting, and marketing^ efforts,

q       help agencies that are not profitable begin growing profitable books of business,

q       encourage strong agencies to improve their performance, and

q       excite agencies whose performance has been fair but not impressive.

Before December 2004, our underwriting efforts reflected traditional paradigms applied inconsistently. These will be relied upon until we develop more reliable methods and use more reliable data. Traditionally evaluation of insurance programs' performance has been mostly subjective and focused on "regulatory climate", "legislative climate", and "judicial climate". Our SMEs are working to help us transition from dependency on unreliable paradigms to reliance on practices such as process mapping and principles such as logic.

Objective measures used to aid our analysis of our performance include profitability, productivity, and adherence. These are explained on pages 24 to 25.

Essence of our work

As underwriters, our primary work product is decisions and our main work activity is decision-making. We are considered knowledge workers because our knowledge is the main tool we use to do our jobs. The decision-making process, as it applies to most types of underwriting can be summarized in five steps:

1.   Decide what information is needed, where it can be found, and how to get it.

2.   Acquire all relevant underwriting information. Investigation precedes evaluation.

3.   Evaluate the underwriting information. Know what is important for profitability and growth. Decide what should be done in response to the risk's characteristics. Look for ways to insure risks profitably.

4.   Select and implement the best course of action after evaluating the potential profitability of the alternative risk management actions identified above. Choose the best underwriting action with the best set of risk management alternatives, communicate it to all stakeholders, and do it.

5.   Monitor the decision. If coverage is issued or renewed, follow up on the results of your underwriting efforts to learn how well you worked.

Purpose of our work

The primary purpose of all underwriting is the selecting and maintaining of a growing, profitable book of business. The purpose of exception underwriting is not to find reasons to decline business. Rather, underwriters are responsible for "engineering" accounts in ways that will increase the likelihood they will be profitable and thereby become acceptable risks. (See page 11 of Pictorial's 1996 Underwriting Basics and articles titled Engineering Exposures to Increase Underwriting Profits in the CPCU Society's Personally Speaking newsletters for September 2003 and March 2004 by John Gilleland.)

Our basic work process

Underwriters who use the following process become problem solving risk managers. Our exception underwriters will be encouraged to support our CSRs by acting as problem solvers when CSRs call because the Underwriter system will not permit a quote to be given for prospects and insureds. This is an extension of the five steps written on the previous page. We are not saying all steps fit XYZ Insurance Company's type of workload. We are indicating we are considering this information and developing our own processes.

1. Identify the problem area(s) described in the applicant's/insured's documentation, on applications or on change requests that relate to underwriting guidelines, principles, etc. Acquire all relevant underwriting information. Decide what information is needed, where it can be found, and how to get it. Consider the following sources for information:

- documentation including the application, claim reports, driving records, vehicle inspections, and notes made concerning insureds' policies

- insurer proprietary services such as credit scoring, judicial interpretation, and payment history

- testimony including CSR recommendations as well as insureds' statements and commitments

- vehicle inspection(s)

2. Evaluate the underwriting information. Know what is important for profitability and growth. Recognize viable alternative risk treatments (insurance and non-insurance). Decide what should be done in response to the risk's characteristics. Look for ways to insure the risk profitably.

- determine the relative importance of the acquired information; consider both subjective and objective information in the context of the risk itself, the insurer's goals, and the underwriter's judgment

- consider potential hazards (anything that increases the chance of loss)

- classify the discovered hazards as moral, morale, physical, or legal and react appropriately to engineer how risks may be managed to satisfy the client and the insurer

- identify alternative risk management actions which might be taken to modify the risk's exposure to loss (e.g., installation of security measures) and the insurer's policy's exposure to claims (e.g., limiting endorsements)

- determine the proper rate(s), credit(s), and classification(s)

- determine the proper insuring agreement and clauses

Our basic work process (continued)

3. Select the best (reconciling your employer's requirements and the prospects' or insureds' needs) set of actions from all types of risk treatments that will produce the most acceptable results for your employer and insureds.

Select and implement the best course of action after evaluating the potential profitability of the alternative risk management actions identified above. Choose the best underwriting action with the best set of risk management alternatives and communicate it to all stakeholders.

- rank alternative actions according to their potential profitability

- consider the location of the client's properties and other insureds for the same type of coverage and determine if there is a good spread of risk

- work to add other coverage where appropriate

- consider producer pressure, regulatory pressure, and underwriting territory goals

- make decisions promptly; develop an offer to insure describing what would be acceptable to the underwriter or reject the application and give supporting reasons

4. Negotiate implementation of a plan using the actions identified above.

5. Document your explanation of the plan and how the plan's progress should be monitored to make sure the desired results are obtained by making notes on the insureds' files and by sending correspondence to the insureds.

6. If all parties to the negotiations cooperate, pursue implementation of the plan as it was negotiated using the actions selected in step number three above.

7. Monitor our plans' progress. Monitor implementation of underwriting decisions. If coverage is issued or renewed, check out the results of underwriting in the future. Learn if underwriting of the risk was successful or not. If it was successful thank those who participated and encourage all to continue to be creative problem solvers. If it was not successful learn what went wrong and encourage all to work smarter in the future.

Our work is disciplined

Our industry has a history of what several publications refer to as undisciplined underwriting.It is referred to as the cause of several insurers' being unprofitable. The following quote is from Warren Buffett's underwriting principles in an old Berkshire Hathaway annual report.

www.berkshirehathaway.com/2001ar/2001letter.html:

When property/casualty companies are judged by their cost of float*, very few stack up as satisfactory businesses. And interestingly - unlike the situation prevailing in many other industries – neither size nor brand name determines an insurer's profitability. Indeed, many of the biggest and best-known companies regularly deliver mediocre results. What counts in this business is underwriting discipline. The winners are those that unfailingly stick to three key principles:

1.      They accept only those risks that they are able to properly evaluate (staying within their circle of competence) and that, after they have evaluated all relevant factors including remote loss scenarios, carry the expectancy of profit. These insurers ignore market-share considerations and are sanguine about losing business to competitors that are offering foolish prices or policy conditions.

2.      They limit the business they accept in a manner that guarantees they will suffer no aggregation of losses from a single event or from related events that will threaten their solvency. They ceaselessly search for possible correlation among seemingly-unrelated risks.

3.      They avoid business involving moral risk: No matter what the rate, trying to write good contracts with bad people doesn't work. While most policyholders and clients are honorable and ethical, doing business with the few exceptions is usually expensive, sometimes extraordinarily so.

Our work is disciplined (continued)

According to the World Book Dictionary a discipline (a professional practice or job) is probably a science if it is:

q    any form of human activity that is the product of a prescribed process

q    a set of working principles or methods gained by education &/or training

Grammar, biology, chemistry, and physics are considered to be sciences.

A discipline is probably an art if it is:

q    any form of human activity that is the product of and appeals primarily to the imagination

q    a branch of learning that depends more on special practice than on general principles

q    a set of working principles or methods gained by experience

Painting, drawing, sculpture, architecture, poetry, music, and dancing are considered the "fine arts"; writing compositions, history, literature, and philosophy are also arts.

Therefore, underwriting at XYZ Insurance Company will be conducted as a scientific discipline. Underwriting can be performed as a discipline if:

q    Correct principles are learned.

q    Learning is applied in structured ways consistently to be effective and efficient.

q    Underwriters confer with each other, whenever unusual circumstances are encountered, to learn and work smarter in the future.

q    Supervisors reward cooperation, compliance, and creativity.

Disciplined underwriting has the following qualities:

q    Our work is correct because it conforms to fundamentally sound principles, applied accurately according to state's rules and laws, in ways stakeholders agree upon.

q    We are consistent because procedures and guidelines are implemented in structured ways.

q    We work cost effectively because underwriters are able to use their time more efficiently and effectively, moving quickly with accuracy, being certain about what is relevant and focused on what needs their attention.

q    We are confident because they know what to do and when to do it.

q    We are comfortable because we are confident knowing the work we do correct, consistent, and profitable because we are productive and not wasteful.

Our reports

The following table lists some of the data base reports we use. It also illustrates how our efforts to detect, diagnose, and improve our profitability are coordinated.

Our pre-renewal underwriting process

Renewal Study List is provided by Shawn E. in our IS Dept in increments of 15 days and worked 30 to 35 days ahead of policy renewal date. This list includes all policies that are renewing in that time frame that have had claim activity within the current policy period.  It includes the insured's policy number, renewal date, type of accident, loss date, amount paid out, and the driver of the vehicle at the time of loss.  This report is computer generated.  Sammy Terger has developed the following process/procedure for working the Pre-Renewal Analysis Report:

Using this has helped her be more correct, consistent, quick, confident, and comfortable.

Our new business exception underwriting process

Kelly Saker was asked to develop our new business exception underwriting procedure. Here is a draft of her process.

We anticipate great returns on the investment we make in Kelly and her process. CSRs will be prompted to ask for exceptions to our underwriting guidelines and underwriters will be enabled to give exceptions more correctly, consistently, quickly, confidently, and comfortably.

Examples of exceptions to underwriting guidelines

Here are some examples of underwriters' exceptions to underwriting guidelines:

# 1 - While we never intentionally agree to insure vehicles used for pizza deliveries, we may agree to insure people who work for pizza delivery companies.  This may be done as long as the driver is only/strictly a cook, an order taker, a manager, etc. and other risk characteristics are mostly favorable.  Documentation would be required if the applicant or insured has given conflicting information about the employee's job. However, if the insured is not able to provide documentation please make a phone call to verify. 

# 2 - We may agree to insure someone who is working as a home-health medical professional, if they do not transport patients or deliver medical related materials and other risk characteristics are mostly favorable.

# 3 - We may agree to insure someone who has had more than one DWI if there is not more than one alcohol or substance abuse related conviction in the last approximately 10 years and other risk characteristics are mostly favorable.

# 4 - We refuse to cover named insureds who are less than 18 years of age unless they are legally married and/or emancipated and other risk characteristics are mostly favorable. If the parent is with the insured at the time the policy is issued go ahead and get them to sign the application, otherwise the only paperwork they would need to sign would be the finance agreement.

# 5 - If an applicant wants to have Comp, Coll, and/or UMPD on a vehicle that is over 10 years old in IL or over 12 years old in LA and AL, we may agree to issue such coverage if new photos of the vehicle are thorough and indicate it is in good condition and other risk characteristics are mostly favorable.  After exceeding the ages noted above, they must have a loan and be in good condition. We will not agree if any vehicle is 14 years or older with no exceptions.

# 6 - Generally, we do not insure vehicles with a cost new over $50,000 for Comp and Coll.  However, favorable renewal study information, a long history, a good driving record, and other factors should be considered when a CSR or insured asks for an exception to our guidelines.  We do not want to agree to insure a vehicle that is in an apartment complex, without security or covered parking.

Our risk alerts underwriting process

Tim McLoud and Ike Mery developed the following procedure statement for responding to risk alerts our department receives from Claims. Here's the workflow process they developed for processing batches of risk alerts:

This document will be used by the Underwriting Manager to train new underwriters beginning in the second quarter of 2005.

Our risk alerts underwriting decision-making process

Tim McLoud and Ike Mery developed the following process for investigating and evaluating individual risk alerts from Claims. Here's the series of questions and actions they developed for processing each risk alert:

This document will be used by the Underwriting Manager to train new underwriters beginning in the second quarter of 2005.

Our in-force underwriting during first 60 days

Sammy Terger was asked to develop a process for responding to losses occurring during the first 60 days (our discovery period) of new business policies. She created the following process and began testing it July 2005. She may delegate it to a Jr. Underwriter after perfecting it.

Our standard of excellence

Our desk underwriters should be able to answer these questions with a high degree of certainty each time they underwrite an application or renewal:

q       Have all relevant questions been asked and answered about all relevant hazards?

q       Does the initial information indicate the risk is likely to be acceptable?

q       Can we charge an appropriate rate for the maximum potential risk?

q       Do the cons out weigh the pros significantly?

q       Is the account's profitability deteriorating significantly?

q       If appropriate, will the insured accept modification of our coverage to reduce our exposure? Or will the insured agree to take actions to reduce our risk exposure and follow through?

q       Will my response to this unattractive exposure compare well with my previous responses to similar unattractive exposures? Am I consistent?

Our work philosophy

According to Webster's dictionary, a philosophy is (1) a discipline comprising its core logic, aesthetics, ethics, etc.; (2) a search for a general understanding of values and reality; (3) the most general beliefs, concepts, and attitudes of a group. This leads us to believe an insurer's underwriting philosophy should include the insurer's:

q       reasoning and beliefs about insurance coverage decision making

q       general understanding of the group's values (attitude and appetite) and perception of reality

q       general beliefs, concepts, and attitudes toward all aspects of making decisions concerning whether or not policies should be issued

This team playbook is a statement of our underwriting philosophy. It communicates our reasoning, expresses our values, and explains what we think about decision making. The essence of our philosophy is:

Underwriting, as performed by XYZ Insurance Company's front-line and desk underwriters, will be conducted according to our team playbook and our guidelines document. Underwriting does not include rating, endorsing, or compliance. All underwriting decisions will be based upon relevant factors evaluated in ways that demonstrate our commitment to logic and fairness. We will investigate and then evaluate households' driving histories and vehicles' condition, maintenance, and eligibility for the coverage requested in compliance with state regulations.

By developing a strong understanding* of principles of insurance and marketing, exercising advanced decision-making skills, and having a strong commitment to provide superior service to our customers, those individuals involved in underwriting will be contributing to the strength of XYZ Insurance Company hourly. XYZ Insurance Company's book of business will increase in size and profitability significantly each year.