Assignment Task:
My department deals with international healthcare plans for Individuals and families, which are subject to full medical underwriting.
Healthcare is underwritten to evaluate the risk and exposures of potential clients. Underwriting involves measuring risk exposure and determining the premium that needs to be charged to insure that risk.
The function of the underwriter is to acquire or to "write" business that will make the insurance company money, and to protect the company's book of business from risks that they feel will make a loss. In simple terms, it is the process of issuing insurance policies. For the client this means that the underwriter decides whether to accept the risk and insure the client. The underwriter decides how much coverage the client can be offered and how much they should pay for it.
Underwriting has to focus on sustainable and profitable business, securing consistency, aligning group and local risk appetite, avoiding undesired and / or excessive risks and accumulations and thereby contributing to protect the capital base of ABC at local and global level.
ABC's aim for this medical underwriting is to ensure an underwriting profit. The company's objective is for the premiums bought in to cover the overall expenses and for ABC not to have to pay out more claims than they forecasted for. In other words, the company wish to maintain a current loss ratio of less than a hundred percent, indicating that all costs are being accounted for by the premiums of the policyholders. Therefore, it is integral that the risks afore mentioned are studied in depth by ABC to be confident that they are charging the correct amount for the premiums based on the policyholders' circumstances.
- Explain briefly, the significant types of internal data used when underwriting this class of business.
- Analyse the extent to which this internal data contributes to the underwriting profitability of this class of business.
- Make recommendations, based on your analysis that will improve the use of this internal data to optimize the underwriting profitability of this class of business
This is an underwriting question focus on internal data- please do not go off topic