Management of the underwriting function

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Reference no: EM132217475

Purpose

To enable candidates to understand the management of the underwriting function in an insurance organisation.

Assignment

Provide a brief context for an insurer or a reinsurer, or a division of either, with which you are familiar.
For this insurer or reinsurer, or division of either:

- Explain one significant insurance product that is negatively affecting the profitability.
- Analyse, based on your explanation, how the underwriting acceptance criteria influences the profitability of this product.
- Make recommendations, based on your analysis, to improve the profitability of this product.

Note:

You are recommended to discuss your own organisation, or one that is familiar to you.

Your answer is confidential to the CII and will not be shared. For this specimen answer, which is widely publicised, a fictitious company has been chosen so as not to highlight any particular company.

1. Analyse key regulation and legislation affecting the underwriting function
1.1 Explain the impact of legislation and regulation on the underwriting function.
1.2 Examine the relationship between the underwriting function and solvency requirements.
1.3 Examine the issues and implications of underwriting business internationally.

2. Evaluate underwriting strategy, policy and practice
2.1 Analyse the relationship between the corporate, reinsurance and underwriting strategies.
2.2 Explain the impact of various distribution channels on the underwriting function.
2.3 Explain the implications of using binding authorities.
2.4 Explain the research required to ensure effective underwriting policy.
2.5 Analyse the factors to be taken into account when entering and withdrawing from classes of business and markets.
2.6 Explain the significance of claims reserving policy and practice on portfolio management.
2.7 Analyse the impact of product mix, segment mix and cover mix on portfolio management.
2.8 Explain underwriting considerations to be taken into account when establishing policy terms and conditions.
2.9 Evaluate the importance of risk acceptance, evaluation and control on the portfolio mix.

3. Analyse the principles and practices of pricing
3.1 Examine the internal and external data required for pricing.
3.2 Explain the various components to be taken into consideration for pricing.
3.3 Explain how the different statistical methods are used in pricing.
3.4 Examine the impact of the underwriting cycle on portfolio management.
3.5 Examine claims information in relation to setting the price, setting reserves and regulatory requirements.

4. Evaluate the management of exposures in the portfolio
4.1 Explain aggregation and the techniques available to measure exposure to single risks, single events and catastrophes.
4.2 Evaluate emerging risks, including systemic losses.
4.3 Explain the various means of managing exposure and enabling capacity, including reinsurance.

5. Evaluate planning, portfolio monitoring and operational controls
5.1 Explain the process of planning, budgeting and forecasting.
5.2 Explain the reasons for monitoring underwriting results.
5.3 Evaluate the techniques for monitoring underwriting results.
5.4 Evaluate the effect of monitoring and forecasting on the underwriting strategy.
5.5 Explain the significance of identifying the underwriting skill-set required, key performance indicators and continuing professional development.
5.6 Evaluate the use of underwriting licences and auditing.

Attachment:- Specimen_2018.rar

Reference no: EM132217475

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