Insurance Underwriter

The Job and What's Involved

An underwriter's job is to set the terms, conditions and price of insurance policies, based upon an assessment of many factors. Insurance is all about risk and how much risk insurance companies are prepared to accept when providing cover.

Underwriting involves a significant amount of skill and cautious analysis. In straightforward cases, actuaries calculate statistical data and produce rating cards. By inputting information into a rating system, insurance terms and premiums are automatically generated.

Once experienced, underwriters may handle more complex or unusual risks, tailoring terms and conditions to different clients' needs. For instance, with business insurance, they may oversee a portfolio valued at many millions of pounds, with many different insurance elements. Specialist product underwriters work together to assemble large-scale portfolios.

Most underwriters specialise in one product area, such as general insurance (household, motor, travel or pet), life assurance (covering illness, injury and death), commercial insurance, reinsurance or a specific sector, such as marine, aviation, construction or power and utilities. However, their tasks and responsibilities are similar.

Their duties include:

  • Assessing the extent of an insurance risk, such as how likely accidents, flood damage or theft may be.
  • Deciding whether a customer is an attractive or risky proposition, and what insurance terms can be offered.
  • Investigating the client's background, consulting with professionals such as doctors, art valuers or health and safety surveyors to establish the facts.
  • Adjusting standard terms or imposing extra charges to reflect a risk, or even excluding part of the risk - for instance, with life insurance the customer may have a pre-existing medical condition which will not be covered.
  • Liaising with insurance brokers and other agents for information about a client's claims history, their security measures and the insurance protection required, before drawing up insurance contracts.

Insurance underwriters work closely with actuaries to make sure premiums are competitive enough to attract and keep clients but cover the potential losses for paying out claims. Increasingly, underwriters play a big role in deciding how much of the risk their company will cover and whether to reinsure some of the risk with another insurance company.

Underwriters usually work 37 to 40 hours a week, Monday to Friday. They often have to go to corporate lunches and hospitality events, and extra hours may be required during busy times. Part-time employment and job-sharing may be possible. Some employers offer flexitime.

Insurance underwriters are office-based, usually as part of a team working alongside insurance technicians and actuaries. Commercial underwriters may travel to meetings at a client's or broker's business premises. Much or their time is spent on the phone, reading and writing up reports.

Underwriters with international clients may travel overseas for brief spells.

The basic starting salary for an underwriting assistant/technician ranges from around £13,000 to £28,000. Other benefits can include contributory pension schemes, medical insurance, life assurance and discounted general insurance.

Getting Started with this Career Choice

There are over 22,000 insurance underwriters working in the UK. Employers range from large composite insurers offering both personal and commercial insurance products, to life assurance firms or product specialists, such as vehicle insurers. Underwriters can also work for Lloyd's of London. Other employers include reinsurance companies, health insurers, banks and credit agencies.

The majority of London Market underwriting jobs are based in the City of London, close to all the major financial institutions and brokerage firms. However, there are opportunities for underwriters throughout the UK, though mainly in large towns and cities. Many insurers also employ underwriting assistants to deal with fast quotations and provide straightforward cover through their call centre operations.

Graduate training schemes are offered by all of the large insurance companies. Some provide specialist underwriting programmes. The cut-off date for applications may be as early as December.

Specialist insurance or finance recruitment agencies are a common source of job advertisements. Vacancies are also published on individual company websites, in sector publications including Post Magazine, Insurance Age and Insurance Times, and financial sections of national newspapers.

Education and Training

There are no standard entry requirements for insurance underwriters. Individual employers tend to set their own entry requirements.

New underwriters are likely to follow one of two paths, either as a graduate on a specific underwriting programme or working up through the ranks.

Graduate programmes usually request a 2:1 degree. Few specify the degree subject, but for life assurance an interest in science, biology or physiology is helpful.

With GCSE's/S grades (A*-C/1-3), including English and maths, it may be possible to work as a clerical assistant or underwriting technician. With on-the-job training and a vocational qualification, non-graduates can progress to become an underwriter.

A Few More Exams You Might Need

Training is usually a combination of practical experience and study for professional qualifications. Large employers usually provide trainee underwriters with a business overview. Learning through observation and under supervision, trainee underwriters will be required to master the computer systems and proposal documentation before underwriting their own accounts.

From a trainee role, it can take between 12-18 months to start underwriting simple risks and up to five years before complex risks can be handled.

Lloyd's underwriters have to pass the Lloyd's Introductory Test within 15 months of starting work. Study can be done in-house or by public courses.

While many of the large insurance firms offer planned training, PATHWAYS, from the Chartered Insurance Institute (CII), provides all employers and employees with a defined career structure to follow, including professional qualifications to meet mandatory standards of competency. The starting point for many underwriters is the CII Diploma in Insurance, which includes compulsory units in:

- Insurance practice and regulation
- Business practice
- Insurance law

Using the new framework, students can opt to study subjects most relevant to their business area, such as commercial property underwriting, the principles of reinsurance or London Market underwriting. Earning credits for each module completed, students can progress towards the CII Advanced Diploma in Insurance (ACII). A range of study options is available from the CII including coursebooks, distance learning and online solutions. Revision days and aids are also available.

Other relevant courses and exams for underwriters include:

  • CII Certificate in Contract Wording.
  • The Institute of Financial Services (IFS) Certificate of Regulated General Insurance (CeRGI).

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Skills and Personal Qualities Needed

Insurance underwriters should be:

  • Decisive and logical.
  • Knowledgeable about the insurance markets, including good technical knowledge.
  • Able to explain clearly the reasons behind decisions.
  • Good researchers.
  • Thorough in their analysis of potential risks.
  • Resourceful.
  • Good with people.
  • Articulate, with good written and verbal communication skills.
  • Creative in their approach to problem solving.
  • Confident working with numbers and computers.
  • A strong negotiator, with good judgement.
  • Diplomatic and discreet when handling confidential information.
  • Quick thinking and calm when working under pressure.

Your Long Term Prospects

Promotion is usually based on merit. A team or class underwriter could progress to more complex risks and possibly supervise a team of underwriters. Relocation or moving employers may be required.

There are good prospects for specialist underwriters.

Alternatively, underwriters could move into related fields, such as risk management, insurance broking, surveying and claims recovery or sales. Self-employment opportunities are limited, but the knowledge and skills gained in underwriting can be helpful in setting up a broking practice.

Get Further Information

The Chartered Insurance Institute (CII),
42-48 High Road, South Woodford,
London E14 2JP
020 8989 8464
Website: www.cii.co.uk

The Financial Services Skills Council,
51 Gresham Street, London EC2V 7HQ
Tel: 020 7216 7366
Website: www.fssc.org.uk

Institute of Financial Services, IFS House,
4-9 Burgate Lane, Canterbury CT1 2XJ
Tel: 01227 818609
Website: www.ifslearning.com

The International Underwriting Association (IUA),
London Underwriting Centre, 3 Minster Court,
Mincing Lane, London EC3R 7DD
Tel: 020 7617 4444
Website: www.iua.co.uk

Lloyd's of London, 1 Lime Street,
London EC3M 7HA
Tel: 020 7327 1000
Website: www.lloyds.com

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