Insurance plays an important role in protecting individuals and businesses against financial loss. However, when claims are denied or disputes arise, resolving them often depends on understanding the roles of key players, especially the underwriter and the arranger. These two professionals operate at different stages of the insurance process, but they both influence how disputes are handled. Understanding their roles helps determine liability, ensures fair treatment, and supports quicker dispute resolution.

The role of the Underwriter 
Underwriters are professionals whose duties include, but are not limited to, assessing the risk associated with offering insurance to an individual or a business. To make this decision, they review information such as the applicant’s financial history and health records. Based on that assessment, they decide whether the applicant can be offered coverage and under what terms.

Underwriters are not involved in the claims processing function to prevent any potential conflict of interest, as their prior involvement in issuing the policy could lead to perceived or actual bias when approving claims. Their responsibilities are limited to conducting a thorough review of the submitted claim alongside the original underwriting documentation, interpreting the relevant policy terms, and applying applicable regulatory requirements. They are tasked with confirming the policy's validity and in-force status, verifying that the claimed loss is both covered under the policy and has indeed occurred, establishing the claimant’s ownership and entitlement to any proceeds, and ensuring the accurate calculation of the benefit amount payable.  

When a dispute regarding the scope of coverage or a claim arises, the underwriter’s assessment becomes an important point of reference.

In the recent case of Norman Luxury Tours (Pty) Ltd v Stalker Hutchingson Admiral (Pty) Ltd (6616/2022) [2025] ZALMPPHC 104 (30 May 2025), the court emphasised the importance of understanding the underwriter’s role in insurance disputes. Norman Luxury Tours (Pty) Ltd (NLT) owned vehicles insured through Stalker Hutchinson Admiral (Pty) Ltd (SHA), the underwriting managers for Santam Limited. One of the insured vehicles was involved in a motor vehicle collision. NLT submitted a claim for insurance payment to SHA, and the claim was rejected. 

SHA argued it was not the insurer, but only the underwriting manager for Santam, meaning it acted solely in the capacity of an underwriting manager, and that the vehicle was not listed in the policy schedule, hence not covered. 

The judgment indicates that underwriting managers, such as SHA, are frequently misunderstood as insurers and therefore are directly liable under insurance policies. However, unless there is a clear and express wording in the contract that confers liability on the underwriting manager in their name, they cannot be held liable for claims under the policy. The insurer remains the principal and bears the legal responsibility for obligations under the insurance contract.

Underwriters are a key part of the insurance process, they help protect the insurer’s financial strength, ensuring that they stay solvent while also making sure policyholders are treated fairly and paid what they’re owed. Their main job is to carefully assess and manage risk to ensure insurance is provided in a responsible way.

The role of an Arranger
An Arranger, usually an insurance intermediary, serves as a bridge between insurance companies and their clients when a dispute arises. They are typically classified as either agents or brokers. It is important to understand that an intermediary acts as an agent for one of the parties involved in the insurance transaction. They can represent the insurer or the insured depending on the specific circumstances of the case.

While not a party to the insurance contract in the strictest legal sense, the arranger facilitates communication between the insurer and insured.

The arranger plays an important role in clarifying policy details for both the insured and the insurer, ensuring that an insurance dispute is resolved. The role of intermediaries is to educate consumers as they equip clients with the information needed to make informed decisions by explaining insurance needs, comparing policies, and evaluating pricing. 

In addition to assisting consumers, intermediaries gather, analyse, and share critical market data, such as trends in pricing, claims, and coverage placements. By combining this knowledge with their understanding of client needs, intermediaries can support the creation of new, innovative insurance products and help develop markets where none previously existed. This exchange of information also contributes to market growth both nationally and internationally and can attract direct investment to the insurance sector and related industries.

Having a clear understanding of each party’s role in the insurance process makes it easier to navigate disputes when they arise. It ensures that responsibilities are properly assigned, reduces delays, and allows for a more efficient and fair resolution, benefiting both insurers and policyholders.

It is important to understand the role of underwriters and arrangers in insurance disputes, as it will clarify who bears liability. Misunderstanding roles can lead to placing liability on the wrong person, delaying resolution of the claim and increasing legal costs. A clear grasp of these roles not only makes the dispute resolution smoother but also promotes accountability, transparency and confidence in the insurance system.


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