Here's how you can creatively evaluate complex policies as an insurance underwriter.

Don't forget "subrogation," "implied warranties," and "endorsements!" Policy language is complex, and insurance agents and customers desire clarity before purchasing a product. Most insurance forms follow a standard outline, so check the document used by the carrier and the policy definitions section before moving on to any named exclusions or riders. For example, if writing Homeowner's, you will want to know if the policy is Named Peril only or All Perils. Other policy elements will vary based on the risk, the product, and the company, so it's important to note each part of the policy and refer to any manuals, training materials, or management with questions regarding the terminology used, coverage limitations, or particular endorsements.

Risk analysis involves evaluating risks associated with insuring individuals, businesses, or assets. This process involves: 1. Risk Identification: Recognizing and categorizing potential risks that may result in financial loss or liability for insurers. 2. Risk Assessment: Evaluating the probability and severity of identified risks using historical data, statistical models, and actuarial analysis. 3. Risk Mitigation: Developing strategies to minimize identified risks through underwriting guidelines, policy exclusions, and risk management practices. 4. Premium Calculation: Utilizing risk analysis outcomes to compute premiums. 5. Monitoring the factors and adapting premiums as necessary to uphold financial stability and profitability.

Risk assessment is essential to underwriting, and utilizing all available tools to assess the likelihood of potential hazards is integral to guaranteeing policy performance. The specific inquiries will depend on the insurance product. For example, if the policy covers a dwelling, physical inspections when available or remote footage when not, alongside past inspection reports, appraisals, permits, and other data, are essential to determining associated hazards. The correct blend of dated wiring, partially updated plumbing, and aged roofing would make a home exponentially riskier. Similarly, another newer property in an area prone to wildfires or hail damage might be equally likely to produce high-dollar claims.

An insurance policy is like a recipe: if any ingredients are missing or don't match the meal you're trying to serve, you might be in for an unpleasant surprise. Look at the language to ensure a comprehensive policy without coverage gaps. Be wary of categorical limits; personal articles, like jewelry, valuable paintings or collectibles, firearms, and electronics, generally have specified limitations. Similarly, property policies might exclude certain features or additions. Determining gaps often leads to recommending additional products tailored to a specific risk class or coverage increases, such as Personal Articles floaters, Inland Marine policies, Umbrella liability, or increased limits or added coverage via endorsement.

It is amazing what results you can get from good prompt engineering. Using ChatGPT or similar LLMs can help with policy interpretation. We have used ChatGPT to actually write the prompts to use. Be willing to tweak and amend the prompts for optimal results.