Doing Their Homework.

Successful underwriters know that the winner in any negotiation is the one who is most prepared.

Average commercial lines underwriters chase fleeting rainbows. Great underwriters save their energy for the real pot of gold.

Considering that underwriting standards and parameters are set at a more universal level and subject to the dynamics of the marketplace, the individual underwriter's greatest assets lie in his or her ability to pre-qualify an account and to negotiate its final outcome.

Individual underwriters probably don't have a material impact on the kinds of businesses their employers may or may not choose to pursue. But once established, the individual underwriter can certainly put his or her expertise to work in selecting the right accounts to pursue.

Opportunities that get into the system because of a faulty prequalification process are expensive, wasteful and ultimately prove unsuccessful. It's the world-class underwriter who is best at bringing in the right business.

Once the mechanics of the deal are complete, the underwriter can begin preparing for the final outcome. One might even make the case that the great ones begin their preparation for negotiations during their prequalification review. The negotiation process is even more difficult if a strong prequalification effort wasn't made.

But outstanding risk selection and prequalification standards are only half the battle. The next step is selling the deal--convincing the other side that your deal, correctly reflecting your company's underwriting position, is the most favorable of all the options. Great underwriters relish this opportunity.

As is the case with most things in life, preparation is key. Leading underwriters thoroughly anticipate and prepare. Underwriters with lesser credentials fail to see the bigger picture. They may be great in reading underwriting guides, navigating through systems, multiplying exposure times rate, combining different sections of a boilerplate proposal and the like. But when it comes to steering a deal through the negotiation stage, those underwriters are ill prepared.

Negotiation is not the mystery that some would have us think. The winner in a negotiation is the person who is most prepared. Great underwriters are cognizant of the limitations of their proposal and the strengths of the competitor's proposal. They understand the buyer and the ground rules the buyer has put forth. World-class underwriters anticipate the buyers' questions and are prepared with appropriate answers. The great ones know the gap between the buyers' wants and their own outer limits.

There are certain tools and characteristics exhibited by each side in the negotiation. They could be classified as techniques, styles, even gamesmanship. Information on negotiation techniques is available through a number of excellent sources, including books and seminars. But all the tools and techniques associated with negotiations have one thing in common--a plan. Great negotiators, and hence great underwriters, anticipate their opponent's moves, prepare a response to every possible objection and follow a strategy through the entire process. They will know what to say if told the price is too high or their coverage is too limited. They will know what to do in the presence of an aggressive buyer or a hostile negotiator. They will have planned thoroughly for all reasonable responses in the negotiating process.

And how do they do this? Some of this expertise is gleaned from experience, some from formal education and some from intuition. But much of the success of great negotiators comes from a complete attentiveness to the process of the deal. They will collaborate with their peers and their management. They will include in the collaboration process the strategy necessary to make the deal successful.

Managers, a more seasoned and veteran group, provide the sounding board to which the great ones can role-play their strategies.

The art of negotiation is something anyone can master. It is widely recognized that confidence and strength are a direct result of preparedness and anticipation. Preparing and anticipating an adversary's position give underwriters the edge they need to achieve a positive outcome for the company

Once a deal is worked through the system, the great ones step up again, well prepared and thoroughly confident to ring up the sale.

Richard Maffuccio is vice president of distribution interface and training, product management, in the Commercial Accounts Group at Travelers Insurance.