The advisor likely knows the client personally and would therefore have a better grasp on the client’s personal reputation, business reputation, and other personal information. Field underwriting refers to the initial decision an insurance agent or producer makes about a potential client’s ability to meet the insurer’s underwriting requirements. The agent decides after performing an initial evaluation of the asset or person.

What Is the Underwriter’s Role?

In the case of an IPO, a securities underwriter prices, sells and resells a company’s shares. Underwriting insurance is similar to underwriting a loan, except that the insurers weigh the probability and size of the average claim compared to the premiums that they expect to collect. In the case of property and auto insurance policies, this is based on factors like the age of the insured, their geographical location, and their past history of making claims. For homeowners and commercial property coverages, they must avoid a large concentration of risks in the same geographic area, as a catastrophic event (such as a hurricane) would mean huge losses for the company.

px” alt=”field underwriting”/>field underwriting also serves as a way to prevent adverse selection. The agent also gets an opportunity to explain to the potential client what they are to expect from the insurance company so that realistic goals are set.

For example, you might mention to an underwriter that this is a long-time client of the brokerage with many policies or any expectations that the client has around premiums. This information helps the underwriter understand the risk better and allows them to work with the agent to win the business (ie. by adjusting premiums to beat competing quotes or to match client expectations as much as possible). Investors rely on underwriters because they determine if a business risk is worth taking. For example, in an initial public offering (IPO), the underwriter might purchase the entire IPO issue and sell it to investors.

To gauge interest in the investment, the IPO specialists contact a large network of investment organizations—such as mutual funds and insurance companies. The amount of interest received by these large institutional investors helps an underwriter set the IPO price of the company’s stock. The time frame for underwriting varies among different investment products, as the underwriter will have to spend some time examining the risk profile of each investment.

Account managers can also become controllers, who are responsible for the financial health and integrity of a company. Knowing how to be an effective field underwriter can save you and your clients time and money, as well as establish a solid reputation for you. At Leisure Werden & Terry, we have the best multi-carrier https://www.1investing.in/ and quick-quote management tool in the industry. You’ve spent a fair amount of time with a prospect, laying out how and why your products and services will be a benefit to them. You’re asking questions, (though you’re not really sure they’re the right ones because you missed that training session!), and your potential customer decides to pull the trigger. The underwriter also guarantees that a specific number of shares will be sold at that initial price and purchase any surplus.