The twenty-first agency in the community is the Underwriting Agency. The agency’s primary function is to assist the community in managing the risks, financial or otherwise, which may affect the community as a whole or individual participants.
The agency facilitates the assessment of risk, financial or otherwise, that participants and agencies pose as they conduct their social and economic activities. As it underwrites, the agency also provides advice to participants and community agencies on measures that can reduce the risk of loss. By doing so, the Underwriting Agency facilitates the protection of community property, distributes risk, and allows for economic and social prosperity by reassuring all parties involved that any risks they face are either properly mitigated or eliminated, and any chance of their occurrence is provided for adequately.
The Underwriting Agency is part of the Business Development Department, which also includes the Business Planning and Marketing Agencies. The department is mainly concerned with efforts that support businesses, by using the information at their disposal to leverage businesses’ efforts through the management of risk, drawing credible business plans, and assisting in their marketing activities. As with other agencies, the Underwriting Agency’s roles are mostly automated, being carried out through an online system that participants have access to. The agency president adjusts this system as needed to reflect changing trends and unique participants’ needs. The three presidents of the Business Development Department train the departmental agents, who then interface with the participants as needed, especially in instances where the automated system is unable to resolve particular issues for participants.
Without active personnel to handle underwriting and to assist participants round the clock, the automated system used by the Underwriting Agency relies heavily on machine learning and algorithmic attributes, besides cloud computing to handle large amounts of data and blockchain to protect the information. These technologies enable the system to properly appraise each participant or agency’s risk and make a recommendation on how they are to be covered. This includes setting a premium for them, as well as recommendations on how they can best manage their risks.
The roles that the Underwriting Agency performs as it facilitates the community’s access to insurance are categorized into either core (without coordination with other agencies) or coordinated, done in concert with other agencies within the community.
The Underwriting Agency’s core responsibilities are concerned with managing risk and coming up with the policies and strategies through which risk incidence is minimized. The agency’s operations enable insurance services to run properly. Businesses are then able to take bigger risks, spurring economic growth and spreading risk in the community. The agency’s core responsibilities are:
- Facilitate the formulation of policies and strategies to address risk
- Manage risk appraisal systems for participants and agencies
- Provide consultancy services to participants and agencies on risk mitigation
Risk strategies and policies
The Underwriting Agency facilitates the drawing up of risk strategies and policies which the community needs to work with in order to manage risk. The agency provides the forum through which the discourse that originates such policies is held. Thereafter, it offers guidance as these policies are documented, and implements them as it assesses risks and advises the community on how to deal with them. Though these policies and strategies are tailor-made for community circumstances where only the community owns assets, not individuals or companies, the principles of insurance still apply. The policies must have a feature of subrogation, where the agency pursues third parties who cause injury to the community and its participants’ interests. They are also guided by the principle of indemnity, whereby the insured cannot look to make a profit from a loss. In these instances, the agency may hire contractors to perform some of the work on its behalf, drawing from a budget pre-approved by the Board of Trustees.
Manage the risk appraisal system
The process of appraising risks and pricing risks is automated. Participants seeking or offering insurance services interact through the system, which assesses the exposure to risk, and assigns the price to cover the risk. Attributes such as profession, age, academic qualifications, economic status, and health, among others, guide the appraisal. After collecting the information, the system makes a determination, which may at times be moderated by the departmental agents, in instances where the appraisal could be materially inaccurate. The Underwriting Agency manages the system to ensure that it runs optimally, making any adjustments that may be necessary to improve it and incorporate new strategic policy changes. Through this system, the Underwriting Agency regulates the community’s insurance practice.
Provide consultancy services to participants and agencies
It is in the best interests of everyone in the community that the chance of loss occurring is minimized, or eliminated where possible. The Underwriting Agency advises businesses and community agencies, as well as participants in their personal capacity, on what they can do to mitigate risks. The agency helps participants manage risks by helping in the implementation of risk management policies, as well as providing other advice that can make their operations and businesses safer and less prone to loss. The agency undertakes this consultancy work by providing the said information on the community’s intranet. Additionally, departmental agents monitor businesses’ approach to risk and guide them on what they can do better, while also advising the agency president on how the system can be made more responsive to the community’s needs.
As part of its consultancy services to agencies and participants, the Underwriting Agency also guides the community on how to best respond to the risk of disasters, whether naturally occurring or not. The agency avails information and monitors its utilization to ensure that all participants have at least a basic grasp of disaster management and mitigation.
The Underwriting Agency coordinates with other agencies so it can effectively enable the community to deal with risks. The coordination is either horizontal (within the Business Development Department), vertical (within the Social Support Vertical), or diagonal, with other agencies beyond the aforementioned characterizations.
Within the Business Development Department, the Underwriting Agency liaises with Agency 20 – the Business Planning Agency to ensure that participants’ business plans are not overly exposed to risk and that the particular risks associated with the business plans can be handled by the community. The Underwriting Agency also liaises with Agency 19 – the Marketing Agency to ensure that marketing plans and strategies that are drawn up by participants with the Marketing Agency’s help do enough to protect participants and the community from undue risk of loss.
The Underwriting Agency liaises with Agency 9 – the Commercial Bank Agency to assess the risks associated with lending money to participants’ businesses. The Underwriting Agency also liaises with Agency 15 – the Audit Agency, so that the Audit Agency understands the parameters of auditing financial and operational risks within the community. The two agencies also coordinate as the Underwriting Agency seeks to establish the level of exposure businesses and agencies are exposed to, and thereby advise them on how to control the risks. The Underwriting agency liaises with Agency 24 – the Assets Management Agency to safeguard community assets from undue risks, while also advising on the best insurance approach. The Underwriting Agency works with Agency 3 – the Leasing Agency as well; to ensure that users implement risk management proposals given to the Assets Management Agency with regard to community assets. The Underwriting Agency works with the Public Relations Agency so that the Public Relations Agency’s activities and engagements with the outside world do not expose the community to undue risk.
The Underwriting Agency works with the Human Relations Agency as participants are vetted. The Underwriting Agency advises on the financial risk associated with admitting them into the system, socially and economically. The Underwriting Agency coordinates with Agency 10 – the Communications Agency so that the Communications Agency can post training material on risk management and mitigation on the community’s website for easier access by participants. Should a subrogation process need to be initiated by the Underwriting Agency, it will coordinate with Agency 13 – the Legal Services Agency, which will provide the legal expertise needed to pursue such a case. This requires the departmental agents in both the Business Development and Governance Departments to actually deliberate on the best course of action.
As the Underwriting Agency sets up the systems required to safeguard community property and interests, including the businesses of participants, it needs to facilitate risk and disaster management policies, and thereafter monitor their implementation within the community. The agency also needs to equip the community so that it is continually better placed to handle the occurrence of risks and disasters. In performing these roles, the agency acts as an insurance company, as well as a business consultant, with the view of enabling businesses to operate without having to bother too much about the associated risks. To the external world, the agency is an insurance company, fully equipped with the remedies needed to enforce claims and ensure that the community’s interests are safeguarded, to the extent of the laws in force.
 There are several areas that businesses must focus on to mitigate risk. They include corporate governance, operational efficiencies, quality of audits, and best business practices, among others. Of particular concern is corporate governance. The Underwriting Agency will guide participants and agencies on sound corporate governance practices, as a primary way of mitigating economic-related risk (Ionescu, G. and R. Vilag. “Risk Management, Corporate Governance and Sustainable Development.” Ecoforum 4.1 (2015): 87-90).
 There is a strong positive relationship between economic development and insurance, among other contributions not necessarily applicable to the community, such as capital transformation and pooling resources, insurance helps in risk hedging. This enables individuals and businesses to go about their activities without the shadow of potential loss hanging over their heads (Ul-Din, S., et al. “Does insurance promote economic growth: A comparative study of developed and emerging/developing economies.” Cogent Economics and Finance 5.1 (2017)).
 Underwriting risk includes pricing it, and thereafter taking over the risk. When pricing, the underwriter will include the chance of a risk happening, the potential loss if the risk does occur, among other issues. This in turn affects the risks a business is willing to undertake, and the risk-mitigating strategies it has in place. The process will be similar in the community, albeit automated this time (Jakovčević, D. and M. Mihelja Žaja. “Underwriting Risks as Determinants of Insurance Cycles: case of Croatia.” International Journal of Economics and Management Engineering 8.5 (2014): 1251-1258).
 Insurance companies reserve the right to pursue the third party who caused a loss (subrogation), after compensating the insured, to the extent of the loss suffered (indemnity). These principles will still apply in the community, whereby, especially in cases where the third party is outside the community, community-based insurers will still exercise their right of subrogation, with assistance and advice from the Underwriting Agency. Insurable risks are only those that can result in a loss, or leave a party in the same position if they occur (Basedow, J., J. Birds and M. Clarke. Principles of European Insurance Contract Law (PEICL). Munich: European Law Publishers, 2009).
 Unlike in past years where underwriting was viewed more as a decision-making art, it is now driven more by scientific data analysis and decision-making. The future of underwriting will be more data—intensive, as technology plays a more critical role in analyzing data and assisting in decision-making. The Underwriting Agency will be well served to continually update its systems to match industry changes (Ernst & Young. The future of underwriting. special report. New york: Ernst & Young, 2015).
 Insurance companies help organizations manage their exposure to risk through various solutions, such as risk engineering, operational efficiency advice, among others. These exercises are meant to minimize the chances of risks occurring, as well as the costs should they occur. In the community, this will be achieved through a concerted effort to equip businesses better will risk-management tools, while updating the community’s posture to risk so that it can offer meaningful help (Denes, F. How can you help engineer the best risk management solutions for your clients? 14 10 2016. 16 06 2019).
 Insurance companies are interested in avoiding risk as much as possible, so that their costs because of claims can be minimized. While the motivation may mostly be profit, it also compels them to proactively engage companies to reduce the occurrence of risk. The Underwriting Agency will not have profit as a primary role, but it will still be mandated to protect the community’s property and interests, by equipping it with the necessary disaster management and mitigation tools, including training and planning (National Research Council. A Safer Future: Reducing the Impacts of Natural Disasters . Washington, D.C.: National Academies Press, 1991).
 Admitting people into an organization is a process fraught with risks. Their expected impact on the entity’s performance is not guaranteed, as is their attitude, which will be instrumental in getting them to perform optimally. Additionally, unforeseen circumstances might come up, including obsoleteness in their trade, illness or even death. The Underwriting Agency helps the community minimize the risk of such eventualities from happening, by using its own risk assessment system to better understand the incoming participant, and thereafter decide whether or not they present a worthy addition to the community, economically and socially (Roberts, M. A Brief Overview of Risk Management In Recruiting. 21 06 2016. 14 06 2019).