The Employer Effect™: A Case for Industry Champions
We know that different employer practices in the same industry result in different experiences with disability costs. In this article, we would like to discuss underwriting specialization and how aligning underwriting “industry champions,” may help improve underwriting profitability.
As group insurance is driven to be more productive, new business acquisition can get very competitive. Before, group insurance companies were divided underwriting by independent units which valued specialization in that business unit. Now, carriers ask underwriters to quote on multiple lines of business.
Due to all of the changes we are witnessing – with complex and multiple products we explore a return to specialization through the use of “industry champions.”
Whether the underwriting teams are set up by single or multiple e or multiple products, or by new business versus renewal or both, industry-specific specialists can play an important role in driving growth and profitability. Teams would also benefit from an industry champion’s understanding of risk and developments within their specialization.
However, carriers have not completely homogenized their teams to be subject matter experts in everything. There are carriers with specialized teams in health care and government sectors because of the unique risks that come with these groups. The government sector in particular, is a relatively untapped market which became quite profitable.
This article posits that industry champions on the underwriting teams can be a vital resource for the organization, not only for underwriting, but also for other parts of the organization, such as claims, product and investment departments. Carriers that choose to leverage the knowledge of specialists who can represent better risks in a given industry, will more readily be able to identify potential Employer Effect opportunities.