The Employer Effect™: A Case for Industry Champions

^{January 2017}

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.