If you have an analytical mind and excellent negotiation and communication skills, insurance underwriting could be the career for you

As an insurance underwriter you'll decide if applications for insurance cover (risks) should be accepted and, if so, what the terms and conditions of that acceptance are.

You will assess the risk of insuring a person or company according to the likelihood of a claim being made. Working closely with actuaries, risk and claims managers, and brokers, you'll ensure a balance between attracting and retaining customers through competitive insurance premiums 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.

Responsibilities

As an insurance underwriter, you'll need to:

  • study insurance proposals;
  • gather and assess background information, including reports and medical records from specialists where appropriate, in order to effectively assess the risk involved;
  • calculate possible risk and decide how much individuals or organisations should pay for insurance (the premium);
  • decide whether the risk should be shared with a reinsurer;
  • visit brokers or potential customers and prepare quotes;
  • liaise with specialists, such as surveyors or doctors, for risk assessment, and develop good working relationships with brokers;
  • negotiate terms with policyholders or their brokers and draw up contracts;
  • ensure that premiums are competitive and that accounts remain profitable;
  • specify conditions to be imposed on different types of policies, for example, asking that a property owner install a security alarm;
  • write policies and help with policy wording;
  • keep detailed and accurate records of policies underwritten and decisions made.

Salary

  • Salaries for a trainee underwriter on a graduate scheme typically start at £25,000.
  • Qualified underwriters typically earn between £25,000 and £40,000.
  • Salaries for senior underwriters/underwriting managers start at around £40,000, rising to £75,000 for those with significant experience.
  • With the right combination of qualifications, skills and experience you can earn in excess of £100,000.

Salary levels vary depending on your employer, area of insurance and location. For example, salaries in the City of London and in areas such as commercial risk and liability insurance are usually higher.

Your financial package 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

You'll typically work Monday to Friday, 9am to 5pm, with some extra hours at busy times.

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 many jobs are available in London and the surrounding areas. However, opportunities also exist in other cities and large towns throughout the UK.
  • You'll need to feel comfortable making decisions about risks and working under pressure to meet deadlines.
  • If you work for an international firm with business overseas, there may be opportunities to work abroad, especially if you speak one or more foreign languages.

Qualifications

Although you don't need a specific degree subject to become an insurance underwriter, a degree in business or management, economics, law or mathematics may be useful.

Many of the large insurance companies offer structured graduate training schemes in underwriting. Entry onto a scheme is competitive and employers usually expect a 2:1 or above.

Entry without a degree is possible in an assistant underwriter role, working as a junior underwriter or insurance technician in an underwriting team. You will then need to take professional training to become an underwriter. It may also be possible to enter as a trainee via a financial services or insurance apprenticeship.

Although employers usually provide training in insurance-related legal issues, you'll need to have a good understanding of the insurance industry. Make sure you research the company you're interested in working for thoroughly and read the specialist press.

If you're interested in a particular company, it's a good idea to visit one of their recruitment events to speak to employees and find out about what they do and what they're looking for.

It’s possible to move into underwriting following a role in actuarial, claims management or risk management.

Skills

You will need to have:

  • 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;
  • self-motivation;
  • 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.

Work experience

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 internship programmes. Competition for places is strong and employers often ask for a predicted 2:1 or above. Smaller firms may offer work experience but you may need to approach them direct to find out about opportunities.

Employers

You can work 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, the world's specialist insurance and reinsurance market - typically specialising in large-scale risk assessments;
  • reinsurance companies;
  • health insurance companies;
  • banks;
  • credit agencies.

Many insurance companies 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 also handle vacancies. Look for advertisements in the national press and specialist journals. The large insurance companies also advertise vacancies on their websites.

Professional development

The initial graduate training scheme may last for up to two years. This is usually followed by another two to three years' training in your chosen specialist area of risk. Training tends to be on the job, working with more experienced colleagues, and is consolidated through taking professional examinations such as the Chartered Insurance Institute (CII) Advanced Diploma in Insurance and in-house courses and workshops. As part of your training, you may get experience in other areas of insurance, such as claims and broking, to help build up your skills and knowledge.

The CII Advanced Diploma in Insurance is the starting point for many graduate underwriters as it provides a comprehensive overview of insurance. Employers will usually encourage you to follow professional qualifications, choosing modules relevant to the area you work in.

Once you hold the Advanced Diploma, you can use the designation ACII and can apply for chartered insurer status (subject to having five years' experience, not necessarily post-qualification) with the CII.

If you've got a place on the two-year Lloyd's Graduate Programme, you'll get experience in a range of roles within insurance. You'll do four placements of six months duration in a range of areas, including underwriting, broking and claims, to help you choose an area of specialism. You'll also take the CII Advanced Diploma in Insurance.

Further study at Masters level is also possible, for example, the MSc in Insurance and Risk Management developed by Cass Business School and the CII. ACII holders can apply to take a fast-track route to completion.

Career prospects

Once qualified, you can work your way up to the position of senior underwriter or team leader/manager. As you gain experience you will usually take 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 and undertake coaching and mentoring.

As your career develops, accepting more responsibility and dealing with complex or greater risks will increase your opportunities to progress and to move to different posts and companies.

Moving 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 complex cases and high levels of risk, or progress into a specialist field, such as marine or aviation insurance.

It's also possible to move into the sales field, developing your relationship-building skills to meet sales targets for specific types of insurance.