Ten Ways to Improve Specialty Lines Underwriting

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© 2015 FirstBest Systems | All Rights Reserved
to Improve
Specialty
Lines
Underwriting
Ways

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©2015FirstBestSystems|AllRightsReserved
10 Ways to Improve Specialty Lines Underwriting |
PROLOGUE
Is it possible to improve specialty lines underwriting? Aren’t specialty lines too….special and
unique?
TEN WAYS TO IMPROVE
SPECIALTY UNDERWRITING
Yes, you can improve specialty lines underwriting. At FirstBest, we’ve been helping
leading insurance carriers improve their underwriting with our collaborative
underwriting management, agent portal, and upload solutions for close to NINE years.
Our experts have spent thousands of hours in the field with clients looking to improve
underwriting profitability, seize new market opportunities, and provide world‐class
broker service. We’ve assembled this piece to share the best practices and lessons
learned in specialty lines underwriting. We hope you enjoy this revised edition of our
most popular eBook!
J. Belizaire, CEO

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INTRODUCTION
Specialty insurance is, well special, because each risk can
be unique, complex, and require a vast amount of data
for evaluation. In many cases, statistical and analytical
models just don’t exist for specialty risks. Instead
underwriters need to rely upon their own expertise. Can
underwriters capture all of that data and make sense of
it? And speaking of “capture,” is it possible to capture
the specialized expertise of your best underwriters to
help others while increasing efficiency and effectiveness?
Success in specialty lines insurance is built around the
ability to grow the right book of business at a profit, and
to quickly identify, tap into, and grow profitable new
market opportunities. So how can you improve the
performance of your specialty books of business?
Specialty brokers expect personal service that’s top
notch. How do you ensure consistent, rapid, and quality
service – without breaking the bank?
According to Deborah Smallwood, founder of insurance
strategic advisory firm Strategy Meets Action, “SMA’s
latest research (Applying Smarts to Underwriting) reflects
a high increase in IT spending in specialty lines
underwriting.”
And for good reason: underwriting risk management
systems can help specialty insurers drive underwriting
profitability in new and existing markets, become more
agile, seize new market opportunities, and improve
service to brokers.
While they might almost seem like “nice‐to‐haves” in
standard lines, underwriting profitability, agility, and
service lie at the very heart of a successful specialty
strategy. They can make the difference between profit
and loss. Let’s take a look at each of these requirements.
Specialty
Lines
Underwriting

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Can you manage or improve underwriting profitability as
well as you’d like? Do your underwriters have all of the
data they need to effectively and consistently analyze
and accurately price risks right at their fingertips? Can
you find experienced underwriters? Do underwriting
teams waste time gathering data from disparate
sources? Do your systems help your underwriters
conduct an informed analysis of the risk or just give them
more data-entry work?
Specialized risks require more risk data, third‐party
sources, and modeling data for effective evaluation and
pricing. So you’ll be able to better manage underwriting
profitability and save time by integrating and bringing
together all of the risk, modeling, and third party data
that underwriters need to accurately and profitably price
and tailor terms and conditions to the risk characteristics.
Add integrated business rules, knowledge management
tools, automated workflows and referrals, and you’ll be
able to streamline your process while embedding
underwriting quality and discipline throughout to build a
profitable book.
UNDERWRITING
PROFITABILITY
Capture
Complete Risk Data
To make sound underwriting decisions in specialty lines,
you need to capture as much relevant data about the risk
as possible – often far more than in standard lines. And that
information will often vary by the specific line of business or
niche. Use custom fields, nested questions and data
validation to ensure that you collect the right information
to make the right decision. By the way, nested questions
and easy‐to‐use interfaces with field validation all make it
possible to collect what you need without placing as heavy
a burden on your brokers.
Today, insurers are looking beyond legacy policy administration systems, spreadsheets, side tools, e-mail, and manual
processes, to a modern and flexible underwriting management system that enables specialty underwriting automation,
yet still provides the high‐touch underwriting model.
01
Deborah Smallwood, Founder, Strategy Meets
Action

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02 Share the knowledge of your best underwriters so that other
underwriters can rise to their level. Capture the best practices of
your best underwriters in business rules, automated underwriting
checklists, reminders, and more. Use automated referrals to senior
underwriters based on the risk characteristics and the underwriter’s
seniority. Enable your team to share their knowledge on the fly,
using rich collaboration tools, such as live chat, context‐sensitive
notes, screen sharing, and shared attachments.
Tap the Knowledge of
Your Best Underwriters

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03Specialty lines underwriting can require vast amounts of
data from numerous third‐party sources. Third‐party
data is especially critical for the analysis of specialty
risks. The longer it takes your underwriting team to find,
assemble, and analyze that data, the more it costs you in
both expense and potential lost opportunities. Instead
of forcing underwriters to hunt for information, bring
third‐party data and reports to them within your
underwriting management system. Use prebuilt
connectors to third‐party services so you can get up and
running quickly. Take the next step, and preload data into
the system’s screens and forms so that underwriters can
not only access the data, but can use it consistently as
part of the decision-making process.
In addition, integrated pricing, analytics, and catastrophe
modeling tools can provide immediate, actionable insight
so that your underwriters can spend more time
evaluating risks and less time re‐entering data into other
systems. Avoid re‐keying by pre‐filling model inputs and
capturing model results directly into your systems.
Bring Together Third-party
Data, Modeling Tools, and
Internal Data

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04Empower your underwriters to tailor coverage, terms, and
conditions to the specific risk characteristics, so you can provide
coverage while protecting the carrier’s exposure and profitability.
Tailor Quotes

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What happens when you identify a new opportunity or niche? Can you jump
on it quickly, or do you need to wait months while hard‐coded business rules
are added or modified?
Especially in specialty lines, time is money. The faster you can identify, tap
into, and scale new opportunities within new or existing markets, the more
premium you’ll write. Use flexible and configurable systems, eliminate
low‐value tasks so you can scale the business, and increase visibility so that
you can quickly address issues and opportunities.
SEIZE
NEW MARKETS
Specialty lines require flexible systems that can be
rapidly adapted to meet the needs of the riskier or
underserved market niches. Look for systems that let
you quickly put in practice the specific fields, rules, and
analytical tools that you need to succeed in your
chosen market’s targets and appetites.
Be Nimble
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10 Ways to Improve Specialty Lines Underwriting | 9
Replace low‐value re‐keying, extra steps to run external systems and spreadsheets,
time‐consuming handoffs and bottlenecks, and manual logging and task-tracking activities.
Use systems that streamline your underwriting process with automated upload,
once‐and‐done data entry, automated lookups, integrated Web services and models, and
underwriter collaboration tools.
You’ll actually free up underwriters to review more submissions in less time. You’ll be helping
them be more selective and focus on the best opportunities. What’s more, you’ll empower
your underwriting team to spend more time with brokers—instead of having to manually feed
and coordinate your systems. Yes, you really can scale the business without a corresponding
increase in staffing.
Eliminate
Low-value
Tasks, and
Scale The
Business 06

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You can’t jump on opportunities you can’t see, nor can
you fix the invisible. Gain visibility: use dashboard tools
to rapidly identify emerging trends and new
opportunities in new submissions. Monitor workloads,
production, ratios, and turnaround, within your
organization and with your brokers, MGAs, and program
managers.
Gain 360-Degree
Visibility07

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WORLD-CLASS
BROKER
SERVICE
How satisfied are your brokers with
your service? Are you helping
them be more efficient? How much
visibility do your brokers have into
your risk appetite and the status of
their submissions? Do you measure
quote turnaround in minutes and
hours, or in days and weeks? Do your
underwriters have time to provide
personal attention to brokers?
Provide world‐class service by
speeding decisions, enabling broker
and internal collaboration, sharing
your risk appetite, and providing a
broker portal where appropriate. As is
always the case in specialty lines, one
size does not fit all: pick and choose
the right level of broker service for
your business.
08ShortenYour Response
Times, and Improve
Service
When you eliminate re‐keying and manual tasks and
provide your underwriters with all the information
they need at their fingertips, they’ll be able to analyze
the risk, develop the appropriate strategy,
and present the best quotes in less time. They’ll have
more time to provide the personal service that specialty
lines demand. And you’ll be helping your brokers
provide better service to their customers.

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09
Enable Collaboration
Among Internal Teams
and Brokers
Where appropriate, use e-mail, real‐time chat,
screen sharing, attachment sharing, and other
collaboration tools within your underwriting
teams, with peers, and with brokers to
expedite information exchange and to speed
decision‐making. Collaborative tools can
improve processes between underwriting
support staff, underwriters, managers, and
service functions.

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10Provide a Broker Portal that
Includes Prequalification
and Eligibility Rules
Where appropriate, provide a portal for your brokers to
expedite the submission process with easier upload and/or
entry, appetite alerts, pre‐clearance, online receipt and
review of quotes and binders, and visibility into their book
of business. Build broker goodwill by eliminating wasted
time on submissions that won’t move forward. Screen out
the risks you are not interested in so that you can
concentrate on the business that does meet your risk
profile. Empower brokers to participate when and where
they choose, as appropriate for the risk, the broker, and
the distribution model. In return, they’ll get real value and
better service.

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