One of the services that RGA offers to its clients is an underwriting operational review. This review is designed to look at the underwriting process -- from request for quote, risk analysis, proposal, through sold case, renewal and, finally, quality assurance. In doing these types of reviews, I am always interested in learning how companies structure their underwriting departments and quality assurance programs.
To gain a more comprehensive and up-to-date picture of how companies currently do this, RGA recently conducted an industry survey on this topic. Twenty six U.S. and 11 Canadian insurance companies responded to the survey where we asked questions pertaining to:
- Underwriters: the number employed, the various underwriting job levels and what tasks they perform
- Workplace flexibility: whether companies allow underwriters to work from home
- Scope of work: if underwriters work on products other than group life and disability
- Assignment of work: if underwriters' work is assigned based on other criteria besides case size
- Organizational structure: advantages/ disadvantages of the organization structure
- The future: any planned changes going forward
- The role of quality assurance: how quality assurance is conducted as well as advantages/disadvantages
In this article, I'll provide a few observations that came out of survey.
As one would expect, the number of underwriters on staff depends upon the amount of business written. Our survey respondents employ a range between 4 and 100 underwriters. Whether in the U.S. or Canada, most of these companies have approximately four job levels within the underwriting department; each level is essentially defined by the number of years of experience in the job with increased responsibility and complexity of work at the higher levels. Some of the Canadian companies also require that an underwriter have a Certified Employee Benefit Specialist (CEBS) designation or have passed actuarial exams to move to higher job levels.
In both the U.S. and Canada, the majority of the companies allow underwriters to occasionally work from home if the need arises. This is most often due to inclement weather or personal issues. In the U.S., it is becoming more common for companies to employ underwriters who regularly work from home on a full-time basis. The requirements for such an arrangement include designated private work space in the home without disruption (i.e., no children at home, etc.) and having attained a certain level of experience and satisfactory performance.
Anecdotally I have heard that underwriters who work from home are expected to be and believed to be more productive than those who work in the office. However, the survey results indicate that productivity is about the same as those in the office. Thanks to advances in technology such as Microsoft® Live Meeting, email, instant messaging and video conferencing, underwriters who work remotely are able to stay connected with their colleagues and up to date with changes.Read More +