Who Wins the War Between Underwriters and Agents?

In the insurance industry, there tends to be a virtual battleground between underwriters and agents, especially when companies have declined to invest resources in relationship-building for underwriters.  It’s an unnecessary war, and one that has no winner.  The company loses, the underwriter loses, the agent loses, and in many cases, the potential client loses. Why is conflict the natural, default state of affairs to begin with?

Why Does the Underwriter-Agency Battle Exist?

From the underwriter’s perspective:

1. Underwriters tend to have a personality type that sees things as either black or white. In their world there is no gray. They feel a sense of pride by keeping things in nice neat boxes. Unfortunately, most risks don’t fall cleanly into one box or the other.   That being the case, no creativity in exploring the case is injected and many prospects are turned away.
2. Many underwriters have the mindset that they win when they reject risks that even get close to a gray area. They feel like they are protecting the company by keeping things out of that realm.
3. They don’t feel empowered to make “creative” decisions and truthfully, if they do feel like they have the power, they shy away from the creative side of risks for fear of retribution from the company if that risk turned out to be too costly for the company.
4. They don’t trust the agency force as a whole. They feel like the agent isn’t telling them the whole truth (and many times they aren’t) so they are naturally skeptical of everything that is presented to them.
5. Truthfully, most companies train their underwriters to keep things in boxes and to be skeptical of the agency force. So, many times the battle line is drawn by the company itself and then ingrained into the underwriter’s mindset.

From the agent’s perspective:

1. Many agents want the commission on the risk that is being presented (sometimes that is at any cost).
2. Agents often have a mindset that the company is too strict, so they go into the discussion defensive and evasive of some facts.
3. Agents will sometimes fudge the facts to get a risk approved and if they are caught, the company now views that agent (and likely all of their agents) with a more skeptical eye.
4. Agents often feel they know more about insurance and the risk than the underwriter, so they come into the discussion of the risk with an arrogance and sense of entitlement that turns off the underwriter from the very beginning.
5. Often prospects and clients place a lot of pressure on the agent to make it happen, so this naturally puts the agent in a tough spot, and unfortunately the dollar signs on the case trump doing the right thing. 

What Are Some Ways to End the War?

• Agents and Underwriters need to see the world from the other side of the supposed battle line.
• Communication of expectations and facts from both sides is key.
• There has to be a focus on relationships from both sides. Not until there is a trust level that is built will there ever be any real progress in disarming both sides of the war.
• We are all selling. We have to remember that.  Underwriters especially need to understand that the agent is selling the case to them, but they also need to remember they have to be selling their solution to the agent.  When the agent understands more of the “why,” they are more likely to work with the underwriter for solutions and then be able to sell that to the prospect.
• There are as many gray risks as there are black or white. Both sides need to think outside of the box and be creative.  Be willing to add or delete coverages on the policy or rate a part of the policy to cover an undesirable portion of the risk
• TRAIN, TRAIN, TRAIN. Agents and Underwriters need to have real world, “in the trenches” focused training.  Not just any training, but something with a track record of success.
• The fact that there is a perception – on both sides – that it’s a battle at all is a huge part of the challenge.  Since there is no real winner in this war, the only real way to end this senseless engagement is for both sides to stop seeing it as a war in the first place.
• When you really boil it down we are all on the same side.  The company wants to write risks at a fair rate, the underwriter wants the company to be successful and profitable, the agent wants to write the risk fairly, and the prospect needs coverage.  The trick is for both sides to wave the flag, find the common ground, and work from that common ground to reach a successful end together.