Introduction
Building Trust: Key Signals for Insurers
By Hindol Datta/ July 10, 2025
Executive Summary
In my thirty years as a finance leader across SaaS, cybersecurity, logistics, consumer products, and nonprofit organizations, I have seen one truth repeated across every boardroom and transaction: insurers do not only underwrite financial statements, they underwrite behavior. That’s where risk management services and thoughtful insurance risk management come into play. More than ever, insurers want to see whether leadership teams can act with clarity when things go wrong, whether processes are lived rather than promised, and whether signals of trust are evident long before a claim is filed. In today’s landscape, even risk management as a service is becoming a strategic differentiator in how companies build resilience.
I learned this lesson early in my career while helping companies integrate acquisitions. Even with strong balance sheets, firms that lacked governance rhythm or had ad hoc compliance systems paid more for insurance and carried broader exclusions. Later, during my time guiding global logistics and SaaS organizations, I saw how something as subtle as email tone or the timeliness of responses could influence how underwriters priced risk. That was when it became clear: underwriting is not only about actuarial math. It is a mirror that reflects how leadership behaves under pressure.
In my work with valuation projects and fundraising, I have also recognized that insurance plays a role similar to capital partners. Insurers allocate resources based on trust. A company that shows evidence of board cadence, security discipline, and compliance maturity earns favorable treatment. A company that responds vaguely, delays documentation, or treats insurance as a box-checking exercise invites skepticism. I recall one underwriter telling me that governance rhythm was the single biggest predictor of long-term claims risk. That statement shaped how I advise founders to approach coverage: not as a product, but as a relationship asset.
For CFOs, this means treating insurers like stakeholders. The same way we prepare investor decks or board packages, we must prepare underwriting narratives. We must anticipate the questions, show proof of discipline, and highlight the systems that reduce entropy. Over time, I have seen companies that practice this approach not only save on premiums, but also gain smoother access to capital, faster claims resolution, and stronger board confidence.
Underwriting is not about perfection. It is about predictability. By signaling trust through governance, cyber hygiene, compliance cadence, and communication tone, companies project resilience. And resilience is what insurers, boards, and investors value most.
Part I: Behavior as the Balance Sheet
I first realized that underwriting went beyond financials when an underwriter told me that email tone shaped risk appetite. At first, it sounded anecdotal. But as I observed renewal after renewal, I saw the truth. Underwriters do not only assess the numbers. They evaluate behavior. They want to know how leadership teams govern, communicate, and execute when no one is watching.
Startups operate in a compressed environment. Capital is limited. Talent shifts quickly. Timelines shorten. In that environment, insurers look for proxies that signal discipline. Governance rhythm, cyber hygiene, compliance cadence, and even tone of communication all provide clues. These signals shape whether insurers underwrite confidence or caution.
Many founders treat insurance like a fire extinguisher: something you buy and store away. Insurers see it differently. They know that most failures do not come from encountering risk, but from failing to prepare for it. Founders who understand this behavioral lens are the ones who outperform. They gain better premiums, attract board trust, and demonstrate operational resilience.
Governance: Rhythm Over Bureaucracy
Underwriters begin with governance because it reflects how decisions are made. They do not require public-company formality, but they want rhythm. When do you meet? Do you document outcomes? Do you review risk?
I once worked with a founder preparing for renewal who presented perfect projections. But when asked about governance cadence, he had no minutes or risk logs. That gap told the underwriter more than the spreadsheets. It suggested disorganization. Premiums rose accordingly.
Governance is not about bureaucracy. It is about muscle memory. Simple routines like monthly digests or quarterly checklists provide proof of discipline. Underwriters use these as signals that judgment exists and operates consistently.
Cyber Hygiene: Control in the Code
Cybersecurity is the new actuarial table. A founder may say they encrypt data and use multi-factor authentication. But insurers probe deeper. Who owns security? When was the last phishing simulation? How are third-party vendors reviewed?
I have seen companies stumble not because of breaches, but because of lack of clarity. Their privacy policies were outdated. Their CTO had never reviewed the cyber policy. Their staff had not been trained since onboarding. These are not failures, but they are fragilities. Insurers price fragility.
Cybersecurity, like finance, is about reducing entropy. The less structure, the more uncertainty. And underwriting penalizes uncertainty.
Compliance Cadence: The Rhythm of Responsibility
Compliance often feels peripheral to startups, but insurers value cadence. How often are policies updated? How frequently is training conducted? Do you track completions?
I once advised a firm that showed its underwriter a log of versioned policies with timestamps. That transparency reframed the conversation. The insurer saw maturity and rewarded it. Insurance pricing does not reward optimism. It rewards maintenance.
Tone and Tempo: The Language of Risk
Underwriters even notice tone. How do founders write? How quickly do they respond? Clarity signals maturity. Defensiveness signals risk.
I have seen underwriters flag companies as high friction not because of incidents, but because of tone. That friction narrowed coverage and slowed claims. Founders must realize that every email during diligence becomes part of the underwriting file.
Part II: Signaling Trust, Reducing Friction
Once you recognize that insurers underwrite behavior, you can reverse-engineer their lens. Documentation, ownership, and rhythm become your best tools. Retain board minutes. Record security trainings. Save policy updates. Assign risk owners by function. Tie reviews to quarterly planning.
The most successful founders I have worked with do not chase perfection. They showcase process. They show insurers a story worth underwriting: one of foresight and responsibility.
Underwriting bias is real, but it can work in your favor. I once worked with a founder who proactively disclosed a compliance gap during a review. The underwriter rewarded the candor, not punished it. That credibility built goodwill that paid off at renewal.
Insurers are not vendors. They are capital partners. Treat them like stakeholders. Ask them what drove pricing, what stood out, and what you can improve. This creates alignment. It also builds trust that shows up when claims or expansions occur.
The real cost of poor signaling is not just higher premiums. It is coverage shrinkage, slower claims, and investor doubt. Founders who manage insurance like a strategic asset avoid these penalties. They create resilience.
In the end, underwriters do not expect perfection. They expect predictability. The application does not live in the form. It lives in systems, culture, and tone. Insurers underwrite behavior because behavior predicts resilience.
Ten Key Questions Underwriters Will Ask the CFO
- How often does your board meet and do you maintain formal minutes?
- Who owns cybersecurity and what testing cadence do you follow?
- What is your documented claims process, and how quickly can you act?
- How do you track completion of compliance training?
- Can you provide logs of policy updates and risk reviews?
- How quickly do you respond to diligence or underwriting requests?
- What deductible or retention levels can your balance sheet absorb?
- How do you manage vendor-related risk and exclusions?
- Have you run mock claims or incident walk-throughs with your team?
How do you communicate insurance posture to your board and investors?
