What is underwriting guidance in reinsurance?

Underwriting guidance is the written appetite a reinsurer uses to decide what to look at, what to decline without a quote, and what needs a senior read. It is not a slogan on a pitch deck. It is a list: class, occupancy, territory, construction, accumulation, minimum attachment, excluded perils, and sometimes a named list of occupancies that will not bind.

Software can extract the fields guidance cares about. Software should not auto-bind because the occupancy string looked familiar. Facultative is optional. Optional means a human. Reinsurer operations start with inbound files against that list, not with a generated paragraph about the risk.

Guidance is a document

Guidance lives in an underwriting authority file, a syndicate business plan, a desk memo, or a system of record. It changes. Mid-year tightening is a new document, not a vibe in the room. If the live file is not the file the assistant used this morning, ACME Construction Ltd will be triaged against yesterday.

Fictional walkthrough: ACME Construction Ltd, acme.example, property facultative. Slip.pdf page 1 names the insured and the period 1 January 2026 to 31 December 2026. Slip.pdf page 2 states USD 10,000,000 any one occurrence and TIV USD 42,000,000. SOV.xlsx totals USD 47,100,000 because a warehouse was added after the slip was typed. Guidance on the desk says construction yards and warehouses above USD 5,000,000 TIV in a named flood zone need a senior underwriter, and that warehouses not on the slip are outside appetite until the placing document is amended.

A useful pack does not decide appetite. It shows occupancy and TIV with spans, and it shows the TIV conflict. The extra warehouse may be the fact that fails guidance. Averaging TIV to USD 44,550,000 hides the occupancy test. Inventing a hours clause does not help guidance either: CAT desks cannot apply a wind window that is not in the file. Walk the same file in the pack inspector.

Facultative versus treaty

On facultative reinsurance, guidance is applied risk by risk. The pack is the evidence. Chase list first if occupancy, territory, or construction cannot be cited. Quoting a construction risk as offices because the cover email said mixed commercial is how you discover the yard at the loss.

On treaty, guidance is applied to the class, not to ACME as a named insured, except for special acceptances and referrals. A quota share that excludes construction occupancy must not receive ACME rows on the bordereau. That is a wording-and-file problem, not a personality problem on the desk. If ACME is thrown out of the treaty, it becomes a facultative pack. Two files. Two guidance tests.

What machines may do

Source-grounded extraction can pull occupancy, territory, TIV, limit, and period so a person can compare them to guidance. It can flag that the warehouse is on the SOV and not on the slip. It can route the pack to the construction desk when the cited occupancy matches a routing table you maintain.

It must not decline ACME because a model felt confident. It must not silently map "construction" to "contractors all risks" because last week's file used that synonym. If guidance says no flood zone Z, and the SOV has no geocode, that is a gap, not a pass. If two locations conflict on zone, that is a conflict. Guidance applied to a guessed location is not guidance. It is a completed form.