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Published on 06/07/2020

One of the secrets to ARAG’s success as an ATE provider is the care, attention and focus that we put into the underwriting of bespoke, flexible schemes for our solicitor partners. This contributes significantly to the creation of successful, long-lasting relationships, of which we are hugely proud.


Stage 1: Getting to know you

As underwriters, our first job when considering a new scheme is getting to know the firm in question. Obviously, we need to know what they want from an ATE solution, including cover requirements, limits of indemnity and the like, but we also have to understand what mechanisms they currently have in place and what plans they have for the future of the business.

At this stage, we also take a look at processes across the range of case types the firm works on, from initial risk assessments and methods for incurring disbursements to how cases are managed from acceptance to closure.


Stage 2: Gathering data

After the initial fact-find, we take a much deeper look at all the available data. Our most extensive source is obviously ARAG’s own, gathered over more than a decade of underwriting ATE cases. Equally valuable though, is data taken from the firm’s own case management systems and from previous insurance providers they may have used.

If a funding arrangement is required, either through ARAG Advance or a third party, then a detailed understanding of how disbursements are incurred is vital. This is usually gathered through a simple extraction from the firm’s disbursement ledger. We do the rest!

We often find that having a dedicated contact, typically in the firm’s finance or IT team, is extremely helpful at this stage. Put simply, the more data we have to examine, the better and more tailored a proposal we can make.


Stage 3: Crunching the numbers

Once we have all the available data, it is time to make some sense of it. Careful analysis enables us to forecast an expected win ratio, claim frequencies and severities by each class of business. Where possible, we can often triangulate data to forecast a future development pattern of cases allowing for different scenarios, such as changes in process.

Ultimately, all the number crunching allows us to calculate a required average premium per class and consider any variations to take account of strong performance or any additional cover requirements. We can also forecast annual disbursement funding requirements, where a funding arrangement is required.


Stage 4: The proposal

The product of all this fact-finding and analysis is a detailed proposal that sets out the premium options offered by case type and our commitment to support the firm and their clients.

Typical options may be included such as different limits of indemnity, flexible damage bands and funding arrangements. The proposal will also include reporting requirements and the terms of business, which will be fine-tuned to match the firm’s individual processes.


Stage 5: Embarking on the partnership

When options have been considered and the details of the contract ironed out, the real work begins. Setting up a bespoke scheme with a new firm means setting up key contacts in our claims, audit and underwriting teams, as well as training fee-earners and others in the firm to make use of our solicitor firm portal, gATEway.


How it all pays off

While all this may seem like a lot of work before we have even issued cover on the first case, it certainly pays dividends in the long run. The effort that ARAG and our solicitor partners put in before working together, engenders trust, mutual understanding and a far greater degree of autonomy than would otherwise be possible.

The detailed understanding of our partners’ caseloads has given us the confidence to be flexible and innovative in our underwriting, but also to successfully defend our policies and business model against numerous defendant challenges and, last year, all the way to the court of appeal.

Disclaimer - all information in this article was correct at time of publishing.