Insurance underwriters decide if applications for insurance cover (risks) should be accepted and, if so, what the terms of that acceptance are.
They assess a risk according to the likelihood of a claim being made by weighing up a number of factors and asking for detailed information from prospective clients (policyholders). The aim is to minimise losses for their company and help to make a profit.
Insurance underwriters work closely with actuaries, risk and claims managers to ensure a balance between attracting and retaining customers through competitive insurance premiums (fees) and being able to cover any potential losses from claims.
Types of insurance
Most underwriters specialise in one type of insurance. The main types of insurance are:
- general insurance: covers household, pet, motor, travel;
- life insurance/assurance: covers illness, injury, death;
- commercial insurance: covers companies;
- reinsurance: part of the risk is placed with another insurer.
Daily activities vary according to the type of insurance offered by the company but may include:
- studying insurance proposals;
- gathering and assessing background information in order to effectively assess the risk involved;
- calculating possible risk and deciding how much individuals or organisations should pay for insurance (the premium);
- deciding whether the risk should be shared with a reinsurer;
- computing results for appropriate premiums using actuarial information, other statistics and own judgement;
- visiting brokers or potential customers and preparing quotes;
- liaising with specialists, such as surveyors or doctors, for risk assessment;
- gathering information and various types of reports (e.g. medical records) from specialists;
- negotiating terms with policyholders or their brokers;
- ensuring that premiums are competitive;
- specifying conditions to be imposed on different types of policies, for example, asking that a property owner install a security alarm;
- negotiating with brokers and drawing up contracts;
- writing policies;
- keeping detailed and accurate records of policies underwritten and decisions made.
- Salaries for a trainee underwriter on a graduate scheme typically start on £25,000.
- Senior underwriters can earn between £30,000 and £65,000.
- For qualified underwriters with the right combination of qualifications, skills and experience salaries can exceed £100,000.
Salaries vary between employers and location and may include a range of additional benefits such as discounted insurance, share and pension schemes and bonuses.
Income figures are intended as a guide only.
Working hours are mainly Monday to Friday, 9am to 5pm, with some extra hours at busy times. Flexible hours are usually offered.
What to expect
- The work is mainly office based, with some visits to insurance brokers and/or client premises.
- London is the UK's major insurance centre and therefore the majority of jobs are available in London and the surrounding areas. However, opportunities do exist in other cities and large towns.
- Underwriters need to be able to make decisions about risks and work to tight deadlines.
- Travel within a working day, absence from home overnight and overseas travel are uncommon.
This area of work is open to all graduates, although a degree in the following subjects may increase your chances:
- business or management;
- mathematics or another numerate subject.
Entry without a degree is possible in an assistant underwriter role, working as a junior underwriter or insurance technician in an underwriting team. If you then wish to take professional training through organisations such as the Chartered Insurance Institute (CII) to become an underwriter, you will usually need to have A-levels, Scottish Highers or equivalent qualifications.
It is possible to do an apprenticeship which includes CII insurance qualifications.
A pre-entry postgraduate qualification is not needed.
You will need:
- effective analytical skills;
- strong interpersonal and communication skills, both written and verbal;
- negotiation skills and the ability to influence others;
- the ability to absorb technical information;
- confident decision-making skills;
- numeracy and statistical skills;
- problem-solving skills and a logical approach to work;
- sound judgement;
- the ability to work to tight deadlines;
- teamworking skills but also a willingness to work using your own initiative;
- customer service skills.
For some posts in life assurance, biological or medical knowledge may be helpful.
Although pre-entry experience is not essential, relevant work experience with an insurance company can improve your chances. Many of the major insurance companies have work placement or summer internships programmes. Competition for places is strong and employers often ask for a predicted 2:1 or above.
Many insurance companies offer graduate training schemes in underwriting. Entry onto a scheme is competitive and employers usually expect a 2:1. To improve your chances, try to get work experience or vacation work in insurance.
Make sure you research the company you are interested in working for thoroughly and read the specialist press to find out about the insurance industry, for example:
It is possible to move into underwriting following a role in actuarial, claims management or risk management.
You could begin by working within any of the following types of insurance organisations:
- large companies: offering a wide range of general insurance cover;
- smaller companies: specialising in one type of insurance, e.g. motor;
- life assurance companies;
- Lloyd's - an insurance market where Lloyd's broking organisations arrange insurance policies for their clients. They tend to specialise in large-scale risk assessments;
- reinsurance companies;
- health insurance companies;
- credit agencies.
Many organisations now have call centre facilities, where staff deal with enquiries relating to low risk or the most common types of assessments. Unusual or higher level risks are then referred to underwriters as required.
Look for job vacancies at:
Specialist recruitment agencies handle vacancies. See advertisements in the national press and specialist journals. The large insurance companies also advertise vacancies on their websites.
The initial graduate training scheme may last for up to two years. It is then usually followed by another two to three years' training in a chosen specialist area of risk.
Training varies depending on the nature of risk assessments the underwriter has to examine. For most, training tends to be on the job, working with more experienced colleagues and familiarising yourself with different departments and their functions, such as accounts, claims and investment.
There is much technical knowledge to absorb during the early months and work is likely to be fairly routine during this period.
The starting point for many graduate underwriters is the Chartered Insurance Institute (CII) Advanced Diploma in Insurance is as it provides a comprehensive overview of insurance, including areas such as:
- insurance and business practice;
- insurance law;
- building a long-term business;
- operational management;
- specific types of insurance such as property and aviation.
Those who undertake the CII Advanced Diploma in Insurance can apply for associated membership of the CII (ACII). This usually takes three years and should improve your chances of seeking promotion or management roles within the industry. A range of study options are available including distance learning, evening classes or day release. Members who hold the CII Advanced Diploma in Insurance are eligible to apply for chartered status (subject to having five years' experience, not necessarily post-qualification) with the CII.
Two graduate training programmes - a generalist and a claims graduate programme - are offered by Lloyd's. The generalist programme provides the opportunity to learn about the various career opportunities available in the insurance sector, including insurance underwriting. As part of the programme, trainees are expected to pass the Lloyd's and London Market Introductory Test (LLMIT).
In addition, Lloyd's trainees undertake the CII Diploma in Insurance. On completion of the LLMIT, it is also possible to take the CII Certificate in Contract Wording, which is particularly relevant to underwriters who decide on the precise terms and conditions of insurance in policy documents.
Further study at Masters level is also possible. The MSc Insurance and Risk Management, developed by the CII and Cass Business School, examines the growing relationship between insurance, risk management and financial services. ACII holders can apply to take a fast-track route to completion.
Movement into other core areas of insurance - for example, risk management, claims or broking - is possible for experienced underwriters, whose broad experience gives them scope for general management roles.
Alternatively, you could choose to move into reinsurance to deal with very complex cases and high levels of risk, or progress into a specialist field, such as marine or aviation insurance.
If you speak one or more foreign languages, there are also possibilities to work abroad.
Opportunities include becoming a senior underwriter specialising in a particular field, or a team leader or manager. As your career develops, accepting more responsibility and dealing with complex or greater risks will increase your opportunities for transfer to different posts and companies. You may find that gaining professional qualifications will aid your career development and advancement, as will relocation.
As you gain experience you may be given responsibility for junior members of staff who will refer their underwriting decisions to you. You may also have the opportunity to deliver training to new or less experienced employees.
Some underwriters move into the sales field, developing their relationship-building skills to meet sales targets for specific types of insurance. This area of work can be particularly lucrative, attracting target-related bonuses.
Opportunities for international travel depend on whether the company deals with insurance cover for overseas business. Increased opportunities for travel may be open to underwriters who speak one or more foreign languages.