What is underwriting? Underwriting as defined by Wikipedia, refers to the process that a large financial service institutions, such as banks, insurance, and investment companies use to assess the eligibility of a customer to receive their products whereby they guarantee payment in case of damage or financial loss and accept the financial risks (Wikipedia, 2009). In simpler terms, underwriting is all about assessing the risk, how much risk a client presents to the financial service institutions and how much benefit would beneficiaries (families) receive in the event of claim. In life insurance, underwriting is one of the most important aspects of the organization as in this area risks are evaluated and thus ensures that the premiums paid by the client are commensurate to the risk exposure. Hence, it is crucial to make prudent underwriting decisions to protect the insurance company from exposure to bad risks that can harm its reputation and financial standing.
In 2017, the life insurance industry is valued at P202.77 billion according to Insurance Commission which is the governing body for all life and non-life insurance companies in the Philippines, supervised by the Department of Finance. (Insurance Commission, 2018). Life insurance industry is growing at rate of 18% 5-year CAGR, riding on Philippines’ economic growth over the past three years. (Philstar, 2018). With a positive economic outlook due to the sustained growth of OFW remittances, the BPO industry creating more jobs, and the population structure entering its most productive phase, the industry is projected to continue its growth in the next nine years among emerging markets in Asia.
Given the strong financial performance of the life insurance industry, there is a booming growth of financial advisers – these are professionals who are responsible in selling life insurance policies to their clients and at the same time giving them financial advice to help manage their wealth. Financial advisers or commonly known as agents do not have fixed salaries unlike employees. Instead, they earn commission, usually about 30 to 40 percent of the premium payments of the life insurance they sell. These agents belong to an agency, supervised by an agency manager working collaboratively with them, providing support and mentoring in order to boost the sales performance.
Behind the strong performance of life insurance companies are committed head office support which drive the business, taking the company to greater heights. Head office support is comprised of Operations (Underwriting, Claims, Policy Admin), Customer Care, and other auxiliary services.
The insurance market in the Philippines has significantly grown over the years moving towards successful global businesses. With the exponential growth in the number of financial sales advisers and head office personnel, Underwriteq Consulting Inc. would like to tap this niche market by bridging the gap on the underwriting and claims technical know-how for better understanding of the insurance products financial advisers sell, for the improvement of basic underwriting guidelines, for better understanding of fundamental principles of claims, and for continuous improvement of insurance companies’ operational processes that positively transform the way their customers feel about insurance.
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