Why Underwriting?

Family, former colleagues, interviewers -- they all wanted to know.  

Why Underwriting?

Family, former colleagues, interviewers -- they all wanted to know. With an undergraduate degree in accounting, my CPA, and nearly 11 years of work experience as a financial auditor, my background was deeply rooted in accounting. So, why throw it all away and start over?

The simple answer?  I didn’t.

 At the heart of both professions are similar core qualities:

 

 

Professional Framework

Accountants follow accounting principles, standards, and procedures when compiling a set of financial statements, to ensure consistency among statements for investors and the public. A good auditor not only understands every accounting rule but also knows how to analyze the financials to discover inconsistencies in the application of those rules. Similarly, underwriters follow a professional framework to develop pricing and to consistently evaluate risks in specific classes of business. This framework takes the form of underwriting guidelines and is based on the rules governed by state regulatory bodies and the Insurance Services Office (ISO).1 Such tools help develop a consistent approach for accepting risks per management’s risk appetite. Adherence to a professional framework for an auditor and underwriter is crucial for consistency, as well as profitability.

Professional Skepticism and Due Diligence

A level of professional skepticism must be maintained to ensure that relationships are kept at arms-length to make well informed and independent decisions. Ronald Reagan famously said, “trust but verify” during the Cold War discussions with the Soviet Union. Common goals and a level of trust are shared with business partners, but we must still independently verify assumptions before making business decisions. We owe our organizations this level of due diligence. A good auditor, and a good underwriter, does not take answers at face value but instead, knows when to challenge responses to make the best possible informed decisions.

Task Management

The daily work of auditor and underwriter is similar: it is project or task-driven with competing priorities and time-sensitive deadlines. Every audit/underwriting risk is unique, even when reexamined the subsequent year, so scrutiny is important. Both auditor and underwriter must provide prompt and reliable information to the marketplace. Both must efficiently and effectively manage priorities so that opportunities nor client trust is lost. Task management is essential to remain responsive to client’s needs, especially with increasing demands and competing priorities. 

Client Management

Lastly, client relationships are at the core of each business model. Auditors and underwriters must be able to manage client expectations. Each client relationship might consist of various teams of people, differing personalities, and certain service level expectations. The foundation of a client relationship is strong communication. Both auditors and underwriters are often challenged with relaying unfavorable news to clients. We cannot always tell a client what they want to hear. Therefore, it is important to practice and finetune the delivery for effective client management.

Conclusion

The beginning of a new job path does not necessarily mean “starting over.” A career is a journey through interconnected work experiences. Commonalities between job functions can very well bridge career transitions. I look forward to bridging the foundation and perspective from my accounting and auditing experiences to this underwriting chapter of my journey. Are you thinking about making a change? Let’s talk. Why not underwriting? 

 

Endnote

 

1 https://www.verisk.com/insurance/brands/iso