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risks associated with insuring individuals, organizations, businesses and assets. Based on this
risk evaluation the underwriter assigns an adequate premium to the insurance policy.Oct 28,
2015
Who is an underwriter?
An underwriter is a finance professional employed by an insurance organization to
evaluate the risks associated with insuring individuals, organizations, businesses and
assets. Based on this risk evaluation the underwriter assigns an adequate premium to
the insurance policy. An adequate premium must generate a profit while also covering
anticipated losses and business expenses. Policies with a higher likelihood of loss (or
higher risk) are assigned a higher premium in comparison to lower risk policies with the
same insurance coverage.
The underwriting manual defines the rules by which the computerized underwriting
system uses to determine the appropriate premium for each policy and determines
which policies are accepted, rejected or flagged for manual review. Since the insurance
environment is constantly changing, the underwriter must frequently monitor and adjust
the underwriting manual to remain profitable. Using predictive models and trend
analysis to evaluate hundreds of thousands of data sets, the underwriter can determine
exactly which policies the insurer should accept and which prices create a profitable
business.
In some cases, the underwriting system flags a policy for manual review. A policy is
flagged when it is right on the edge of being accepted or rejected. In these cases, an
underwriter must manually review the policy to analyze the risk characteristics and
choose to accept, reject or modify the application. Many smaller insurance companies
still manually underwrite all of their insurance applications, meaning the underwriter
manually investigates and researches the risk of each insurance application to assign a
premium and choose to accept or reject the applicant.
Review and analyze the customer base to evaluate trends in profit and loss
Recommend improvements to underwriting guidelines
Prepare underwriting reports
Provide underwriting advice to clients and insurance agents
Ensure compliance with government regulations
Work with marketing team to target profitable customers
Work with insurance agents to explain target market
Work with IT team to develop and improve underwriting systems
Required skills:
Detail oriented
Investigative nature
Ability to analyze and investigate large amounts of data
Ability to reach sound decisions with supporting data
Ability to coordinate and organize complex tasks
My life as an underwriter
As an underwriter myself for a number of years, I truly enjoyed the analytical and
investigative nature of the career along with the opportunity to be an integral part of the
insurance environment where my decisions directly impacted the performance of the
company.
That immediately threw up a red flag in my mind, either this applicant has the most
dangerous Pomeranian Poodle on the face of the earth, or they were lying about the
breed of their dog.
This investigation led to further research into our homeowner insurance policies. Come
to find out, our computerized underwriting system did not require the insurance
applicant to validate the breed of their dog, leaving us exposed to loss caused by
applicants that lie about their dog breed. Based on this finding we created logic in our
computerized underwriting system that required a mandatory onsite inspection of all
applications that owned a dog. This helped us to better reduce the loss faced by dog
attacks and helped us to more accurately assign the appropriate premiums to dog
owning homeowners.
If youre looking for an interesting career in one of the most stable industries in the
world, where each day brings new thought-provoking analysis and investigation, I
strongly recommend pursuing a career as an underwriter. I loved it and you will too.
Types of underwriters
In this article I primarily focused on the career of an insurance underwriter, but thats not
the only type of underwriter position
Bank underwriter
Investment underwriter
1.Purpose
On October 7, 2013, the Group established JTRUST ASIA PTE. LTD. (hereinafter,
JTA) to conduct business in fast-growing Southeast Asia. Through JTA, the Group
intends to apply its domestic business model, established in Japan and has been
the source of growth in retail finance, amusement business and real estate
business in overseas market. As a part of this effort, JTA decided to conclude
the agreement to underwrite convertible bond issued by GL, which is aggressively
conducting the hire-purchase financing business in the Kingdom of Thailand.
Through this transaction, we will proactively support GLs business expansion
utilizing our network and know-how.
GLs core business is motorcycle hire-purchase financing business in the Kingdom
of Thailand and the Kingdom of Cambodia and GL plans to conduct the same business
in other countries in Southeast Asia including the Lao People's Democratic
Republic. Through this transaction, the Group starts to invest in hire-purchase
financing business which will benefit considerably from the population growth and
economic expansion in ASEAN and other countries in the future and strives to
generate synergy through provision of financial support by group companies.
2.Overview
(i)GL
GL is a finance company founded in 1986 and operates mainly motorcycle hire-
purchase financing business in the Kingdom of Thailand. GL maintains high level
of profitability in motorcycle hire-purchase financing business whose competitive
environment in the Kingdom of Thailand is becoming increasingly tough. Recently,
GL has been expanding its domestic business by extending its sales channel in
northeast area and area surrounding Bangkok. Moreover, in 2014, GL acquired
Thanaban Co ., Ltd., the 5th largest player in the industry and has been
increasing its shares steadily. As a result, GL ranks 1st in number of new
contracts in 2014 in Thailand, based on GLs latest statistics.
On the other hand, under its new vision of To become the leading ASEAN Regional
Finance Company, GL entered other markets in Southeast Asia from 2012. In the
same year, GL acquired exclusive rights of Honda motorcycle leasing in the
Kingdom of Cambodia and has been rapidly expanding motorcycle hire-purchase
financing business of Honda motorcycles whose share exceeds 95% in the Kingdom of
Cambodia. Moreover, GL formed a strategic alliance with Siam Kubota Corporation,
a leading agricultural equipment manufacturer, to provide a financial lease
service in Cambodia from late 2013 and has been steadily increasing the number of
contracts.
(ii)Hire-purchase financing business in Southeast Asia and synergy with the Group
(i) Issue price: USD 30,000,000 (3.6 billion yen, 1 USD = 120 yen)
(ii) Interest rate: 5%
(iv) Conversion price : 10 Baht per share (36.90 yen, 1 Baht = 3.69 yen)
3.Overview of GL
1,449.79 million Baht (as of end December 2013)(approximately 5.36 billion yen, 1 Baht = 3.6
5. Capital
yen)
9. Operating performance and financial position for the past 3 years (unit : million yen )
December
December 2011 December 2013
2012
4.Schedule
GLs shareholders meeting to vote for resolution Late April 2015 (planned)
regarding issuance of convertible bond
5.Future outlook
(Reference)
i.Overview of J Trust Group
8. Operating performance and financial position for the past 3 years (consolidated, unit : million yen )
* Nobuyoshi Fujisawa, President and CEO of J Trust owns all shares of NLHD Co.,
Ltd.
5. Capital 200 million Singapore dollars (approximately 16.3 billion yen)(as of December 31, 20