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An underwriter is a person or company that shoulders the liability for a potential loss, such as a claim on an insurance policy. Underwriting managers, like most managers, are supervisors. They ensure that an insurance company’s underwriters follow the company's rules for accepting such risk, in hopes of minimizing it and keeping the company profitable. They may also help to shape the company’s underwriting rules and ensure that those rules are effective. Underwriting managers are often asked to help develop products and pricing for the company.
Underwriting managers play an active supervisory role over other underwriters, trainees and account managers. They assign work and make sure projects and assignments are completed according to schedule. They often are responsible for hiring team members and may play a role in their training.
Building effective relationships with external clients — including vendors and brokers — and internal clients — including salespeople and the marketing department — is another task assigned to underwriting managers. They are often called on to aid a broker or the sales force in closing a sale, negotiating terms or pricing, or explaining requirements. They utilize excellent interpersonal skills to balance the goals of the various parties with the interests of the company.
Profitability of a book of business is one of the key focuses of the underwriting manager. Profitability is largely determined by the amount of premium collected versus the amount of claims paid out. He or she helps establish the guidelines for accepting risk and determining the premium required to accept a risk.
The underwriting manager also influences profitability by requiring that the client adhere to certain safety standards or loss-control measures. He or she will establish a schedule of loss-control surveys and premium audits to help monitor these factors. Loss-control surveys help the underwriting manager determine potential hazards and the measures that might be implemented to reduce of avoid them. Premium audits help determine whether the risk was rated properly and what, if any, adjustments need to be made to the premium.
In addition, the underwriting manager is responsible for generating reports that measure profitability, exposure, claims experience and other metrics. These reports are often shared with upper management, the underwriting manager’s team and brokers. Many companies post summaries of these reports for the public to help gain trust and earn confidence.
An underwriting manager normally has the final say in whether to accept a risk that does not adhere completely to the company’s underwriting guidelines. The underwriting manager may agree to accept a risk outside of the guidelines to cement a relationship with a broker who has a large book of business with the company, or to obtain other, more profitable lines of coverage from the client. Based on a high level of understanding of the company’s situation and goals, the underwriting manager is able to make judgment calls, which others in the company may not be qualified to make, about whether to accept a risk.