According to http://en.wikipedia.org/wiki/Underwriter insurance underwriters evaluate the risk and exposures of potential clients. They decide how much coverage the client should receive, how much they should pay for it, or whether even to accept the risk and insure them. Underwriting involves measuring risk exposure and determining the premium that needs to be charged to insure that risk.

About a 6 months ago I decided to insure my income because I saw an ad offering something I didn't know I wanted. It seemed prudent and not too costly! I submitted my application, which was followed by a meeting with Carl from Compass Underwriting. Contracts were signed and I felt jolly sensible! In the past month something has changed about my risk profile or about the industry I work in or about the country I live in or perhaps it's about the currency I earn in or perhaps it's thanks to Fukushima? Anyway, something has changed; I got this letter:

The letter

Dear Mr Goode,

Re: IMPORTANT — SafetyNet Income Protection Insurance
Policy Number: SF------162
Arranged by: Berkeley Alexander Insurance Services 8565

We are writing to inform you that, with effect from 1st May 2011, the insurer for this policy will change from Red Sands Insurance Company (Europe) Limited to Jubilee Insurance, Lloyds Syndicate 5820. In accordance with your policy terms and conditions we are giving you 30 days notice of a replacement insurer.

Yadda yadda, you get the idea….

Premiums up, benefits down, risks managed

Here's a summary of the change in benefits between old and new policies.

Old policy monthly premium: £47.85
New policy £110.40

Old policy benefit period: 24 months
New policy benefit period 12 months

Old policy benefit amount (monthly) £1,850
New policy benefit amount (monthly) £1,500

Old policy looks quite favourable compared to new policy me thinks.

2011 will be an interesting year

I shall be declining the new policy offer from Jubilee. I guess they've reciprocated by gently encouraging me to vacate their risk register. The point is this, underwriters know stuff. They know what makes good business sense and what doesn't. I have to assume current economic conditions, unprecedented uncertainty and perhaps a couple factors I'm not aware of were fed into spreadsheet-x and I got pivoted to the touchline!

Curriously this letter arrived the day I made a rather big decision. Lot's of changes in my life for sure — I will say more when it's appropriate to do so.

It's going to be an interesting year.