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Soft underwriting skills are a strong predictor of profitability

Argenta Private Capital Management’s recent independent analysis of Gracechurch’s Leading Underwriter dataset highlights a positive correlation between the ranked underwriters and syndicate profitability.

This follows on from similar work done by Lloyd’s in 2019 which showed a link between “growth mindset” characteristics in the Leading Underwriters group and profitability.

So why should a peer and broker ranking be made up of more profitable underwriters? To an extent this is the ‘wisdom of crowds’; academic research proves that large groups make more accurate assessments of performance. In this case the large cohort of brokers and peers are overall better at spotting ‘winners’.

Underwriting ‘edge’ is also reliant on soft skills such as work ethic, curiosity and relationship-building…and these are the stand-out reasons why peers and brokers rate underwriters highly. Brokers work as efficiency models, using set routines and workflows to ensure that risks get placed in an efficient and timely manner – this plays well to those underwriters who are more flexible, decisive, and prepared to offer solutions as opposed to the sluggish, passive (and often daunting) fixed mindset ‘technicians’ in ivory towers. These people become synonymous with and reinforcing of the company brand.

The evidence therefore shows that performance should also be evaluated on the human factors that give competitive advantage in business development, while recognising that technical skills and discipline are important table stakes.

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