Insurance Underwriter

Also known as:

Underwriter, Insurance

Introduction

Insurance underwriters assess the risks involved in accepting requests for insurance cover. They decide whether to accept the risk and work out how much to charge. Most underwriters specialise in one class of insurance, such as general insurance, life assurance or commercial insurance, or in a specific sector such as aviation or marine insurance.

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Work Activities

Insurance provides a service to customers who wish to be protected from loss caused by events such as fire, theft, accident or illness. The customer pays a regular premium and receives a written policy that sets out the conditions under which an insurance company pays compensation.

Insurance underwriters work on behalf of insurance companies, deciding whether or not to accept requests for insurance cover. If a request is accepted, an underwriter works out the conditions relating to the cover, together with the price to be paid (known as the premium). Requests for cover often come from a broker acting on behalf of a client. The broker may be comparing premiums quoted by several underwriters. An underwriter must assess the risks involved, then quote a premium that is competitive, yet sufficient to make a profit.

If the request for insurance cover includes no unusual risks, an underwriter uses guidelines laid down by head office to quote a standard premium. Underwriters must use their own judgement if there are risks that are not covered by the guidelines.

Where a request for cover includes unusual risks, or complex technical factors, an underwriter usually asks an insurance surveyor to investigate and produce a report indicating likely problems. The underwriter examines the report before quoting a premium. The underwriter also takes into account factors such as the possibility of getting further business and the likely quotations from competitors.

Underwriters must keep up to date with technological developments and changes in law and taxation. The amount of expert knowledge required is so great that most underwriters specialise in one class or sector of insurance. Specialisms include general insurance (household, motor, travel etc.), life assurance, commercial, aviation, marine, construction or power and utilities insurance.

Some underwriters specialise in re-insurance, where an insurance company accepts a risk that is so large that it takes out insurance cover itself with several other companies, so spreading the risk.

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Personal Qualities and Skills

To be an insurance underwriter you need good numerical and computer skills.

You must pay close attention to detail and approach tasks in a methodical and systematic way. You need the knowledge and confidence to take important decisions and you must show good judgement in taking those decisions.

You need good spoken and written communication skills. You must be able to work under pressure and meet deadlines.

As you will be dealing with confidential matters, you must be honest, trustworthy and discreet.

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Pay and Opportunities

Salaries for underwriters vary, depending on the sector, employer and location.

The pay rates given below are approximate.

Starting salaries are around £16,000 - £20,000 a year. Insurance underwriters earn in the range of £25,000 - £35,000, rising to around £40,000 - £50,000 a year. Higher earners can make around £100,000 a year.

Salaries may include performance related pay, profit sharing or company bonuses.

Other benefits may include low-rate mortgages, medical insurance, and life and pension cover.

Underwriters usually work a 35-hour week Monday to Friday.

Most employment is in major cities, but opportunities occur in branch offices throughout the UK.

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Adult Opportunities

It is illegal for any organisation to set age limits for entry to employment, education or training, unless they can show there is a real need to have these limits.

Some entrants have a background in insurance. Others are graduates, especially those with a business-related (including insurance) or other numerate degree.

If you don't have the qualifications needed to enter your chosen degree or HND course, a college or university Access course (eg, Access to Business) could be the way in.

These courses are designed for people who have not followed the usual routes into higher education. No formal qualifications are usually needed, but you should check this with individual colleges.

Distance learning is available from the Chartered Insurance Institute (CII), including Lloyd's operations courses.

Sponsorship for higher education study may be available from some of the larger insurance companies.

• 14% of people in occupations such as insurance underwriter work part-time.
• 26% have flexible hours.

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