Careers in Insurance: Underwriting

Underwriting

• Entry requirements
• What you might do
• Training and professional qualifications
• Rewards
• Prospects
• Useful links

Underwriters assess risks and decide whether to accept applications for insurance cover - and on what terms. This is a core skill because it is the essence of insurance - carried out well, it will minimise losses for a company and help it to make a profit. Consequently, underwriting capability has massive influence on the competitiveness of insurance companies.

Underwriters, who often specialise in one type of insurance, determine policy terms and conditions, and calculate premiums based on risk assessment, statistical and background information - looking at the potential for a loss based on their experience of a particular trade or industry.

 

Entry requirements

This area of work is open to all graduates, with preference given to degrees in subjects like business/management, economics, law and mathematics, or in relevant science or engineering disciplines. Some larger insurance companies include underwriting as part of general graduate management training schemes.

 

What you might do

Underwriting work is largely about relationship building and it demands close attention to detail. You are likely to be involved in networking to get things done, gathering and assessing information, studying proposals and, for any given scenario, calculating possible risk, weighing up the likelihood of a claim being made and in what timeframe.

Underwriters compute results to determine the cost of insurance and decide whether the risk is viable. You might also find yourself liaising with specialists, negotiating terms with policyholders or brokers, specifying conditions for certain types of cover, and drawing up policies and contracts.

 

Training and professional qualifications

Graduate training schemes for underwriters typically last for around two years and are often followed by another two or three years' training in a specialist area of risk.

Most training tends to be on the job, working alongside experienced colleagues and learning about different departments and about accounting, claims and investment functions. Some employers may ask you to complete Chartered Insurance Institute (CII) professional examinations as part of your training. Accomplished through distance learning, evening classes or day release, reaching CII associateship level usually takes 2-3 years.

Professional underwriters (not to be confused with underwriter members) working at Lloyd's insurance market must pass Lloyds' own tests. Study for this is provided by in-house and external courses through the CII.

 

Rewards

The typical salary for a new graduate entrant varies from £16,000 - £20,000, increasing with substantial experience to £40,000 - £100,000.

Professional underwriters at Lloyd's of London, who are different from 'underwriter members', can earn over £300,000.

 

Prospects

Movement into other core areas of insurance - for example risk management, claims or broking - is quite common for experienced underwriters, whose broad experience also 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.

Source: http://www.insurancecareers.cii.co.uk/2.5.underwriting.html

Useful links

Chartered Insurance Institute (CII)
42-48 High Road, South Woodford, London E18 2JP
Tel: 020 8989 8464
www.cii.co.uk/

Financial Services Authority (FSA)
25 The North Colonnade, Canary Wharf, London E14 5HS
Tel: 020 7066 1000
www.fsa.gov.uk

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

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