What Walks Out the Door When Underwriters Retire

An in-appetite submission hits a veteran underwriter’s inbox. 

She pauses, reads the file again, and passes. The guidelines would have let it through, but twenty years of writing business taught her what a bad risk looks like even when it's dressed up as a good one.

She's retiring in eighteen months. The person inheriting her desk has strong technical skills, a sharp analytical mind, and five years of experience - all of it in a hard market.

He'll inherit her book. He won't inherit the instinct that made her pass.

The judgment that doesn't transfer

The insurance industry's talent crisis is well-documented. The U.S. Bureau of Labor Statistics projected the industry would lose approximately 400,000 professionals through attrition by 2026, a deadline that's already here. 

For every new professional entering the industry, roughly six are approaching retirement. And all the projected underwriter openings over the coming decade are replacement-driven, not growth, according to the BLS Occupational Outlook Handbook.

It’s easy to frame this as a headcount problem. Insurers need to fill seats, so they recruit, train, and hope the pipeline holds.

But the expertise walking out the door is rarely the kind that transfers through onboarding programs or guidelines documents:

• Recognizing when a clean-looking account has been shopped too aggressively
• Knowing which follow-up questions to ask a broker when something doesn't quite add up
• The instinct to slow down on a submission that technically meets guidelines but carries a pattern the underwriter has seen go wrong before

That kind of judgment is built over decades, through thousands of accounts, across shifting market conditions. 

It's often invisible even to the people who have it. 

A study by London-based insurer Convex found that when experienced underwriters described their preparation process, they identified five steps.

When a behavioral scientist observed what they actually did, it was fifteen nuanced processes. Most of their expertise became subconscious.

It lives in the space between what the data says and what experience suggests. And it's leaving the industry at exactly the moment it's needed most.

Why a soft market makes it worse

A soft market, wherever it takes hold, exposes the judgment gap faster than anything else.

When pricing compresses and brokers have leverage, the decisions that protect a portfolio aren't the obvious ones - they're the nuanced calls:

• Which submissions to pursue and which to let go
• How to maintain broker relationships while holding firm on risk quality
• When organizational pressure to maintain volume is reason to slow down rather than speed up

These calls get harder to make as margins narrow. U.S. combined ratios are already expected to worsen throughout 2026 - even after two of the strongest underwriting years in over a decade.

The current generation of junior and mid-level underwriters built their skills in a hard market where pricing was strong, submissions were plentiful in many lines, and conditions were more forgiving. A soft market flips those dynamics.

Mike Krefta, former CEO of Hiscox Re and ILS, put it directly in an Insurance Journal piece on underwriting through market cycles: talents and skills are diluted in a soft market. 

The question he raised - whether underwriters scrutinize risk with the same rigor when they're under pressure to write - becomes more acute when the underwriters doing the scrutinizing have never operated in these conditions before.

Soft markets have a documented history of exposing exactly this gap. 

In the early 1980s, a prolonged soft market fueled what academics described as a price war: insurers priced aggressively and loosened risk standards to chase premium volume and the investment income that came with it. 

The consequences arrived by mid-decade when a liability insurance crisis forced a painful market correction.

Research into the 2017 soft market found a similar dynamic: underwriters continued writing business they shouldn't have, not out of incompetence, but because organizational incentives and individual habits overrode discipline in the absence of structural guardrails.

The consequences of these gaps are measured in combined ratios, not anecdotes - and they often surface years after the decisions that caused them.

The lesson from both cycles is the same: soft markets don't create bad judgment. They reveal where judgment was never embedded in the system to begin with.

Beyond the soft market

The judgment gap shows up anywhere the task exceeds the underwriter's proven experience - soft markets are just one trigger.

Emerging risk classes like cyber, climate-related perils, and parametric products don't have decades of loss history for pattern recognition to draw on. 

When an insurer enters a new line or expands into an unfamiliar geography, even experienced underwriters are working with thinner institutional knowledge. 

And when M&A activity consolidates teams, the institutional memory of the acquired book often walks out with the people who wrote it.

In each of these scenarios, the same dynamic plays out: the decisions that protect a portfolio depend on a kind of judgment that isn't documented, isn't automated, and increasingly isn't in the building.

For MGAs and smaller specialty operations where the bench is already thin, the compounding effect across any of these conditions is even more acute.

Where does underwriting discipline need to live?

None of this is invisible to underwriting leaders. CUOs know that judgment matters. COOs know that institutional knowledge is concentrating in fewer, older hands.

What's considered less is whether the industry is building the infrastructure to preserve it.

The insurers that have successfully navigated market shifts, portfolio expansions, and other transitions didn't rely on judgment that lived in any one person's head.

They found ways to make pattern recognition systematic - embedded in how submissions are evaluated, how appetite is enforced, and how portfolio composition is monitored. Not dependent on who happens to be in the chair.

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