Insurance underwriter

Insurance underwriters assess the risks involved in accepting requests for insurance cover. They set the terms and conditions relating to the cover, together with the price. Most underwriters specialise in one class of insurance, for example, property or life.

Work activities

Insurance cover is available to help customers who have suffered losses caused by events such as theft, accident or illness. The customer pays a regular amount of money (called a premium) and receives a written policy. This sets out the conditions under which the insurance company will provide a settlement by way of repairs, replacement or reinstatement of items. Insurance underwriters work for insurance companies or for the Lloyd’s of London market. They decide whether or not to accept requests for insurance cover. If a request is accepted, an underwriter defines the terms and conditions relating to the cover, together with the price to be paid (the premium) and any exclusions. The request for cover usually comes from a broker acting on behalf of a client. The broker might be comparing premiums quoted by several underwriters. An underwriter must assess the risks involved, then quote a premium that is competitive. However, their aim is also to make the best possible profit for their company. If the request for insurance cover includes no unusual risks, an underwriter usually uses pre-established rating guidelines laid down by their head office to quote a standard premium.

Underwriters must use their professional judgement to decide if there are any risks that are not covered by the guidelines. Where a request for insurance cover includes unusual risks, or complex technical factors, an underwriter usually instructs a risk surveyor to investigate and produce a report outlining likely problems. The underwriter examines the report before quoting a premium. They also take into account additional factors such as the financial position of the prospective customer, the possibility of further business and likely quotations from competitors. Underwriters considering requests for medical or life insurance need to look at the medical history, occupation and hobbies of the person wishing to be insured. They might ask for a doctor’s report before deciding whether to accept or reject the request. Most underwriters specialise in one class of insurance. Specialisms include marine, aviation, motor, life, property, pet, pensions and liability 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, thereby spreading the risk. Underwriters operating in the insurance market at Lloyd’s of London act on behalf of syndicates – groups of individuals – or corporate members. They do most of their business face to face, negotiating deals with brokers.

Personal qualities and skills

As an insurance underwriter, you’ll need:

• An enquiring mind.
• To enjoy solving problems.
• Good verbal and written communication skills.
• Negotiation skills.
• To be decisive, with the ability to justify your decisions.
• Teamwork skills.
• Number and IT skills.
• To be able to analyse and interpret statistical data.
• Attention to detail.

Pay and opportunities

The pay for underwriters varies depending on the sector, employer and location. The pay rates given are approximate. Insurance underwriters start on about £18,000 per year, rising to as much as £65,000 with experience. Managers could make more. Salaries might include performance-related pay, profit share or company bonuses. Other benefits could include low-rate mortgages, medical insurance, and life and pension cover.

Underwriters usually work 36-38 hours a week, Monday to Friday.

Employers are insurance company offices and regional branches, city firms and small independent brokers. Opportunities for insurance underwriters occur in some towns and cities throughout the UK. Most opportunities are found in larger cities. A high percentage of financial services industry employees are based in London.

Where are vacancies advertised?

Vacancies are advertised in local/national newspapers, on employers’ websites, through the Chartered Insurance Institute careers website, on the Government’s Find a Job service, and on job boards.

Entry routes and training

Many employers recruit trainees who have an HND or a degree. Some degrees or HND courses in business studies might include insurance options. There are several degrees and postgraduate courses in risk management available, for example, the MSc in insurance and risk management. There might be opportunities for entrants with A-levels, Edexcel (BTEC) level 3 National qualifications or equivalent to enter as underwriting administration assistants and then gain promotion after further training and experience.

A level 4 (higher) apprenticeship in the role of insurance professional is also a good place to start. Most of your training will take place in the workplace, while you will also work towards relevant qualifications.

On-the-job training of up to two years is often supplemented by study for the Chartered Insurance Institute (CII) Advanced Diploma exams. Some degrees could give exemptions from certain of the CII exams. Contact the CII for further details.

The Institute of Risk Management (IRM) offers both the International Certificate and Diploma in Risk Management by flexible distance learning.

Insurance underwriters can progress to senior underwriter and underwriting management posts.

Qualifications

For direct entry to the Chartered Insurance Institute (CII) Advanced Diploma exams, the recommended prior learning requirement is either three A-levels or equivalent, or the diploma in insurance. Entry to this job is common for those with higher education (HE) qualifications such as an HND or a degree.

For entry to a degree course in any subject, the usual minimum requirement is:

• Two to three A-levels.
• GCSEs at grades 9-4 in two to three other subjects.

Alternatives to A-levels include:

• Edexcel (BTEC) level 3 National qualifications
• International Baccalaureate (IB) diploma.

However, course requirements vary, so check prospectuses carefully.

To get onto a higher apprenticeship programme, you will usually need two A-levels, plus GCSEs in maths and English.

Adult opportunities

Age limits: 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 (for example, 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) and the Institute of Risk Management (IRM). A range of colleges and universities offer courses and degrees in risk management, including with part time/flexible and distance learning study options.

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

Related careers

• Actuary
• Insurance broker
• Insurance claims investigator
• Insurance loss adjuster
• Paraplanner