“The scope of day-to-day activities of a commercial underwriter can be broad – they can be involved in devising new products, supporting account teams, managing the portfolio, visiting customers. However, there is one fundamental that defines the role,” says Craig. “At its core is the ability to gain a deep and full understanding of the customer’s business – how it operates, its commercial trading environment, its sector and local or international context. And to translate its need to protect the business and its cashflow into a compelling value proposition – in the form of trade credit insurance policy – that is structured and priced to suit their circumstances.”
In many cases, underwriters are increasingly able to put together the best fit for the customer by drawing on a set of building blocks. But in a number of cases, the level of complexity, the size of the business or its particular industry circumstances requires a more tailored approach, with the underwriter crafting a solution with specific endorsements to meet its specific needs.
Endorsements can take many forms: they might relate to how a company structures its payment terms, its international exposure, its specialist industry or countless other situations. In any case, they typically involve a higher level of risk and require an even deeper dive into the customer’s world.
“Commercial underwriting comes into its own when dealing with exceptions,” says Nicolas. “Exceptions that makes for some fascinating encounters. We might be confronted by a new business model, new legislation, a newly emerging market. And we have to quickly become experts in such new areas, to accumulate knowledge, ask the right questions, and come up with answers that make sense. The goal is to be able to craft policy wordings that cover those non-standard endorsements and addresses the specific needs of the clients.”
But there are risk considerations on both sides, he stresses. “We have to safeguard the sustainability of our portfolio – to find the right balance between addressing the needs of the client and protecting and ensuring we are not taking on more risk than we are happy to accept.”