Published February 1, 2024

Beyond Market Conditions: The Power of a Good CUO

This piece co-authored by Anna Kupik and Jacob Galecki of Galecki Search Associates.

Is 2024 the year of the Chief Underwriting Officer? In January alone, we have seen executive search activity for this crucial leadership role peak—across legacy carriers, reinsurers, and Insurtechs.

Is this a sign of a softening market, or is the increased demand for highly-skilled underwriting leadership permanent?

Galecki Search Associates tracked an uptick in CUO movement throughout 2023 that suggests regardless of market conditions, a strong Chief Underwriter is always in-demand.

The Hard Market’s Impact on Underwriting Talent

When the conditions of a hard market—higher premiums, stricter underwriting standards, and limited capacity—cause insurers to increase account selectivity, the impact on the insurance talent market can vary.

As the property market reconciled increased CAT severity, many insurers made sweeping decisions about their coastal state strategies. In many highly-publicized cases, this contributed to workforce reductions that impacted underwriters with books in states like California and Florida.

However, a hard market does not always translate to layoffs. In fact, the need to attract and retain experienced professionals underwriters and underwriting leaders can ramp up, especially in specialty lines, large/corporate property, and excess and surplus lines underwriting.

Talent becomes a critical factor in an insurance company’s ability to adapt and thrive in challenging market conditions. Skilled professionals are needed to assess risks accurately, implement effective underwriting practices, and contribute to the overall success and resilience of the company during periods of market tightening.

The Characteristics of the CUO are Evolving

Hiring at the CUO level in Q1-Q3 of 2023 favored candidates with demonstrated tenure, meaning professionals who had successfully seen organizations through previous volatile market cycles. While experience remains a key trait, in later 2023 and early 2024 we are seeing more demand for CUOs with additional characteristics that are tied to market trends, including:

  • Sustainability/Green and Renewable Energy Expertise: Corporate responsibility concerning climate is at an all-time high, and this drives the need to offer underwriting solutions for climate-conscious clients. In both commercial and personal lines, CUOs with this kind of experience are highly-sought-after.
  • Change Management and Digital Transformation Experience: Disruption is the new normal when it comes to digital, and Insurtech is truly an extension of the insurance industry at-large. Every underwriting desk is being remade by the power of AI, and top underwriting leaders are adept at keeping their underwriters productive while effectively upskilling them for the present and future.
  • Workplace Dynamics, Including Generational Workplace and DEI: With 50% of the industry retiring in 15 years or less, younger CUOs are arriving in the C-Suite, as well as more women and people of color. Leaders with connective tissue to more progressive company cultures are also revered; DEI is not optional in 2024.
  • Network, Network, Network: When a strong CUO moves, it’s natural to see a wave of strong underwriting talent follow them. CUOs who have influence and relationships with top underwriting talent help insurers solve talent pipeline and underwriting training issues faster. No surprise here—solid underwriters beget the best brokers and business.

Hiring a CUO? Plan Way Ahead

Underwriting strategies are long-term commitments, and nothing deters growth or broker loyalty like insurers who dabble in and then back out of markets. The Chief Underwriting Officer typically oversees a five-year (or longer, at the global carriers) risk selection strategy and needs to be nimble enough to adjust, with the input of other key stakeholders like actuaries, product development, and claims leadership. This is a robust market for CUO talent, and a CUO search should be a commitment to getting the absolute best fit for your organization and its future.

Galecki Search Associates will continue to track the evolution of the CUO role throughout 2024 and beyond.

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