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2/12 W01/March 2017 Award in General Insurance

I Insurance professionals

Within the insurance market place there are a number of key roles, some of which we will consider now.
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Chapter I1 Underwriters

When we looked at the nature of insurance in chapter 1, we talked about it as a common pool. The
contributions of many people were put in to the pool and the losses of the few were met from it. In
essence, the task of the underwriter is to manage the pool as effectively and profitably as possible.
Thinking of the role of the underwriter in this way, we could say that the main functions of the
underwriter are to:
• assess the risks that people bring to the pool;
• decide whether or not to accept the risk (or how much of it to accept);
• determine the terms, conditions and scope of cover to be offered; and
• calculate a suitable premium to cover expected claims, provide a reserve, meet all expenses and
provide a profit.
An underwriter may be:
• a Lloyd’s underwriter, who accepts the whole or part of a risk offered on behalf of Lloyd’s members
and receives a portion of the premium paid in return for agreeing to meet that proportion of each loss;
• a person employed by an insurance company, whose job it is to make decisions on acceptance and
premiums and apply the company standards; or
• a term used to describe an insurance company itself, fulfilling the role of an underwriter because it
accepts risks.

I2 Claims personnel

An efficient claims department, staffed by competent and professional claims personnel, is vital to Reference copy for CII Face to Face Training
ensure the proper management of an insurance company’s funds. The role of claims personnel is to:
• deal quickly and fairly with all claims submitted;
• be able to distinguish between real and fraudulent claims;
• assess the cost of a claim so that a realistic value is placed upon it prior to payment (this is the
process called reserving);
• determine whether others, such as loss adjusters, need to be involved; and
• be able to settle claims with the minimum of expenses.

I3 Loss adjusters
A loss adjuster is an expert in processing claims from start to finish. Straightforward small claims are
usually negotiated and settled by in-house claims staff. However, in the case of larger claims or complex
policy wordings, the services of a loss adjuster will be used. Their functions are:
• the investigation of the circumstances surrounding a claim;
• determining whether and to what extent the policy covers the loss;
• facilitating any emergency measures, e.g. for the protection of property;
• negotiation of amounts claimed;
• negotiation with any specialist suppliers; and
• making a recommendation for settlement to the insurer.
The insurer will then consider the amount and, if satisfied, offer this sum to the policyholder.
Their aim is to negotiate a settlement, within the terms of the policy, which is fair to both the insurer and
the customer. Chartered loss adjusters in the UK are members of the Chartered Institute of Loss
Adjusters (CILA) and act independently, which usually means their fees are met by the insurers who
instruct them.