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INSIDE UNDERWRITING: QUIET! Artist at Work.

In a previous column, we described some of what an underwriter does as they try to find an appropriate match of risk and premium. Yes, there is a science to underwriting – The Law of Large Numbers, actuarial statistics, etc. But there’s also an art to it. We are not Robo Underwriters who simply plug numbers into a formula, hit a button and wait to see what premium is spit out. We have to consider factors that are not quite as quantifiable. For example, if a firm has claims, we would need to know more than just how many claims. We look further to understand the severity and the frequency of claims, the practice areas they fall under, the attorneys involved and so on. Instead of just knowing what practice area(s) an attorney specializes in, evaluate where on the risk spectrum they fall within that practice area. Are they handling small-dollar, low-risk fender benders? Or are they handling high-dollar and very risky class actions? If an attorney handles intellectual property work, does it involve simple trademark registrations? Or the much riskier prosecution of patent infringement? It’s tapping into the “art” of the process that requires a certain personality.

I just finished reading a fascinating book – “QUIET – The Power of Introverts in a World That Won’t Stop Talking” by Susan Cain. And in a moment that can only be described as serendipitous, just as I was reading about introverts in the workplace – the opportunity presented itself for me to contribute to the May edition of the ALPS Report.

As Cain writes in her book, Carl Jung said “introverts are drawn to the inner world of thought and feeling.” Extroverts on the other hand, tend to be drawn “to the external life of people and activities.” Also, extroverts tend to work very quickly, accept that mistakes go with the territory and are therefore easily able to move on to the next task with no regrets. Introverts work slowly, considering all information and options available to them before moving forward. If mistakes are made, they ruminate on what they did and what they might do differently if they were given a “do-over.” Extroverts prefer talking to listening, don’t mind conflict, and like to be around people. Introverts are generally quite the opposite – good listeners, would rather write than talk, avoid conflict and, if given a choice, would prefer to be alone (or with just one or two others). With these characteristics in mind, which personality would you like underwriting your law practice, deciding the risk your work represents and determining the appropriate premium you should be asked to pay?

As I was (slowly and deliberately) thinking about writing this article, I thought about the ALPS Underwriting Department in general and each of my underwriting colleagues specifically. I can tell you that based on the descriptions and parameters contained in Cain’s book, our group would fall fairly easily under the introvert heading. And I can also tell you we wouldn’t apologize for it either. We are a close-knit group, like to converse, joke and have fun, and we care about each other. But when the rubber meets the road, we are all business. We treat every insured like they were the only one we have to underwrite that day, yet we constantly strive to assess the presented risk in a way that is fair and reasonable to our entire pool of insured lawyers.

Cain quotes the science journalist Winifred Gallagher, “The glory of the disposition that stops to consider stimuli rather than rushing to engage it is its long association with intellectual and artistic achievement.” And speaking of science and art, here are a few things (again, from Cain’s book) that would never have come to be if not for introverts:

  • The theory of gravity
  • The theory of relativity
  • Peter Pan
  • Nineteen Eighty-Four and Animal Farm
  • The Cat in the Hat
  • Schindler’s List, E.T., and Close Encounters of the Third Kind
  • Google
  • Harry Potter

If you would like to know more about the power of introverts, here are a couple of links associated with Cain’s book that you might find interesting:

http://www.cnn.com/2012/03/18/opinion/cain-introverts-power/

http://www.npr.org/2012/01/30/145930229/quiet-please-unleashing-the-power-of-introverts

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