CATLIN CASE STUDY – Predicting Individual Underwriting Job Performance
Introduction and Executive Summary
As one of the market leaders in the global insurance market, Catlin has always been at the forefront of performance with some of the most highly skilled underwriters in the world. The approach by Consultant Psychologist Christina Griffiths, in conjunction with Birkbeck University London, to be a part of a research study into the factors determining underwriter job performance, was viewed by Catlin as an opportunity to support cutting-edge academic research focused on furthering the state of knowledge for the Underwriting Industry.
The study was developed as a scientific research project, with a strong business focus and impact. It focused on using psychometric tools to identify predictive factors of job performance among underwriters within the USA and UK, including the Lloyds market. With Catlin’s support, the project was completed successfully and Christina became the first person to establish a clear link between cognitive ability, behaviour, decision-making styles, risk attitudes and job performance.
The 8 factors identified demonstrated a strong link towards predicting underwriter job performance. Using psychometric testing, these factors enable organizations to make more informed recruitment, talent management, and professional development decisions for enhanced Underwriter effectiveness.
Job performance is a critical aspect of any business. This is especially true in the world of insurance underwriting, which has always relied on the skills of its underwriters as the key drivers of business success. The underwriting market continues to grow and shift, with greater automation of simple analytical tasks, creating avenues of opportunity in more complex, high- value underwriting areas.
As the opportunities for underwriters demand more skills and higher levels of effectiveness, the talent pool for these critical skills is actively shrinking. Finding, developing and retaining talent is critical, but in the absence of clear parameters for job performance, the decisions made tend to be biased.
The ability to identify the parameters that drive job performance and the use of psychometric tests to look for these skills in potential underwriters would be invaluable. The objective of the study was to use scientific methods to create a model of high performers in the Underwriting industry based on specific behaviours and abilities
As one of the leading providers of Insurance Underwriting services, Catlin’s strong support of the research extended to providing Christina with access to some of its most valuable resources, its Underwriters and their Supervising Managers. Due to the nature of the research, participation was on a strictly voluntary basis across two geographies, the UK and the US.
It was also essential to reassure the participants, both underwriters and their managers of the confidential nature of their individual responses. A series of confidence building steps were undertaken to maximize the comfort level of the participants and the researcher was available on a personal level throughout the project to address any questions on a 1-2-1 basis.
An initial brief of the purpose and aims of the study was provided by Paul Brand, the Chief Underwriting Officer of Catlin to participants in the UK and US offices. Detailed instructions in video and written format were also provided to all participants to foster a common understanding of the requirements of the online questionnaires.
The focus of the research was on identifying and measuring indicators of cognitive ability, personality, decision-making and background styles. A second, separate questionnaire was also sent to their supervising managers to gain an external perspective of job performance.
The analysis of the data revealed eight factors that demonstrated an impact on job performance amongst insurance underwriters:
- Cognitive Ability: High performers are likely to be better at abstract thinking, reasoning and problem solving in complex working environments
- Emotional Stability: Higher performers are more likely to demonstrate behavior, which is hardy and generally relaxed, even under stressful conditions
- Risk Ability: High performers are likely to have strong statistical numeracy and risk literacy, and therefore be better able to evaluate claims and interpret forecasts
- Decision Making Confidence: High performers are less likely to feel confident in decisions they make for themselves compared to lower performers, creating a false image of confidence among low performers in their dealings while being less effective
- Decision Making Option Generation: Higher performers see themselves as being able to create alternative options rather than simply accepting those available, leading them to provide better solutions when carrying out core tasks and responsibilities.
- Decision Making Avoidance: High performers are likely to see themselves as less constrained, and more decisive in their decision-making. Once a choice has been made they do not delay putting those decisions into practice
- Risk Attitude to Ethics: High performers saw themselves as being more risk adverse in attitude when it comes to situations which might involve compromising moral standards
- Risk Attitude to Health and Safety: Higher performers are more likely to see themselves as having a greater appetite for risk when pertaining to or dealing with the general condition of the body or mind relative to the other sample groups
The identification of these eight factors is critical, as it identifies a practical, unbiased way of assessing potential job performance in the critical field of insurance underwriting. Christina was the first person to identify a clear link between decision-making styles, risk attitudes and underwriter job performance.
The applications for this research are far reaching. Using psychometric testing for these factors would help companies identify, hire and develop the right underwriting talent for the short and long-term. While these factors are not the sole determinants of performance, they do present a significant step forward in the process.
Catlin’s role in supporting this research has been critical to its success, indicative of its forward thinking and commitment to furthering the state of knowledge in the underwriting industry.
Catlin Group Limited was a global P&C insurer and reinsurer with six underwriting hubs in London, Bermuda, the United States, Asia Pacific, Europe, and Canada. Domiciled in Bermuda and listed on the London Stock Exchange, Catlin owned and managed the largest Lloyd’s syndicate since 2000 and had a network of offices in more than 50 cities with more than 2,300 employees in 25 countries. Catlin had a deep commitment to research and innovation and furthering the state of knowledge in the industry within which it operated. Since the time of this study, it has merged with XL to form XL Catlin one of the world’s largest providers of insurance underwriting services.
About Christina Griffiths
Christina is a globally oriented and innovative NED and consultant psychologist, with extensive experience in the insurance, technology, and consultancy sectors. She has a track record in improving the performance and productivity of revenue-critical professionals. By combining her scientific expertise and commercial acumen with emotional sensitivity and natural curiosity, she is able to improve the capability of organisations, teams and individuals. As a result of collaborating with her clients, they report that they find the insight and courage to make the changes required to improve performance and raise their game.