Field Underwriting

What Does Field Underwriting Mean?

Field underwriting is the initial assessment made by an insurance agent or producer regarding a potential client’s ability to meet the insurer’s underwriting requirements. This assessment involves an initial evaluation of the person or asset in question.

The role of an insurance advisor is multifaceted. On one hand, they represent the client’s best interests by advising on necessary coverage, explaining policy terms, and helping clients find the best possible coverage for their needs and budget.

On the other hand, an insurance advisor also represents the insurance company’s interests. In this capacity, they are responsible for accurately communicating risks to the insurer and performing some level of field underwriting, sometimes called frontline underwriting.

As the advisor is often the only person in the sales process who has a close relationship with the client, they are well-positioned to discover information that might be unknown to underwriters and others further up the chain. The advisor may personally know the client, giving them a better understanding of the client’s personal and business reputation, as well as other relevant personal information.

Through effective field underwriting practices, the advisor can set realistic expectations for clients, streamline the underwriting process, and help underwriters select more suitable risks. Good field underwriting benefits the advisor, the client, and the insurer alike.

Insuranceopedia Explains Field Underwriting

Field underwriting involves the advisor, agent, or producer taking on some of the initial underwriting tasks. When done well, field underwriting benefits everyone involved.

Because the advisor, agent, or producer often has a personal relationship with their client, they gain insights into aspects of the client and risk that underwriters, who are more removed, may not know. This can include the client’s personal and business reputation or their transparency in answering underwriting questions about business activities or medical history. An agent who has built a personal connection with the client can provide valuable input on the applicant’s moral character, which aids in risk assessment.

In addition to boosting sales, field underwriting helps prevent adverse selection. After gathering relevant information about the potential client and confirming that they meet underwriting standards, the agent can confidently endorse the insurer’s acceptance of the client. This process also allows the agent to manage the client’s expectations by explaining what they can realistically expect from the insurance provider.

Effective field underwriting starts with understanding the client’s goals. In a life or health insurance context, this might mean knowing the client’s purpose for purchasing insurance, the source of funds for premium payments, and any relevant medical history. An agent’s familiarity and relationship with the underwriter can further facilitate the process. If the agent has a longstanding, trusted relationship with the underwriter, it can make the underwriting smoother, as the agent’s endorsement carries weight.

Including field underwriting insights in the submission process is essential. When submitting a risk for underwriter evaluation, the advisor can include standard application forms along with any additional, relevant information. This might take the form of an email or attachment detailing observations from conversations with the client and other field underwriting activities. For instance, the agent might note if the client is a long-time client with multiple policies or if they have specific expectations around premiums. This extra context helps the underwriter better understand the risk and work with the agent to secure the business, such as by adjusting premiums to match or improve upon competing offers.

As an agent, you represent both the client and the insurer. Positioned “in the field,” you serve as the insurer’s “eyes and ears,” providing essential insights that benefit the client, the agent, and the insurer alike.