INSURANCE SALES

Very closely connected with marketing, there may be considerable overlap of activity, if separate sections exist. The name, however, indicates the functions, which specifically will include:

(a) Product liaison: it is vital that the closest co-operation exists between Product Development, Marketing and Sales, for obvious reasons. Poor communication between colleagues in this area could have disastrous results.

(b) Sales enhancement programmes: again requiring co-operation with other colleagues, e.g. Training and Marketing.

(c) Monitoring: it is important to keep abreast of results and trends. Again, much teamwork with colleagues is required.

UNDERWRITING

This may be defined as the selection of risks to be insured and the determination of the terms under which the insurance is given. With non-life insurances, it also involves a continuing process of monitoring results and individual risks, to see whether renewals should be offered, and on what terms. Special features to note are:

(a) Life insurance: for individual life policies, underwriting is a once only exercise, since the policy cannot be cancelled by the insurer and changes are only possible with the insured's consent. Because of its crucial importance, life insurance underwriting is often centralised.

(b) General insurance: here the range of different cover is very wide and mistakes in underwriting are not permanent, in the sense that policies will come up for renewal and their terms be reviewed, and can even be cancelled if necessary. Therefore much less centralised underwriting is still affordable.

(c) Guidelines: whilst underwriting is at a ‘one to one’ level, there is obviously a need for the preparation of underwriting manuals, rating guides and similar guidelines for staff. These involve considerable research and development, again with much attention to trends and results.

(d) Target risks: curiously, this term could mean highly desirable types of business (in Life Insurance) or highly undesirable types of business (in General Insurance). In the former, of course, this is business the insurance intermediaries should be encouraged to seek diligently. In the latter, the term could mean large, hazardous risks, e.g. petrochemical plants.

Each insurer will have its own ideas about what constitutes desirable or undesirable risks. Typically, however, in life insurance, healthy young professionals are likely to be desirable contacts. In theft insurance, jewellery stores in Central Hong Kong may not be favoured.

(e) Stop-lists: sometimes given other names, a ‘stop-list’ indicates those types of business that should not be encouraged, or should be rejected if offered. Some examples may readily come to mind, with different types of insurance, although not every insurer will have the same opinions on this subject. Nevertheless, compiling such lists involves considerable underwriting expertise, especially bearing in mind the sensitivity over discrimination of every kind (see 7.3 below).