Underwriting is a key part of how insurance works. Whenever an individual or company applies for an insurance policy, it’s the responsibility of the underwriters to review all of the application data, assess the risk level of each applicant, and from that determine the appropriate premium to offer (the amount the customer pays for their insurance coverage).
They also deal with requests for renewal of insurance policies and any mid-term adjustments (a change that is made to a policy during the policy term which sometimes requires an amendment to the premium).
Under the skin of underwriting
Underwriting involves use of bespoke computer software, liaison with actuaries and at times use of risk assessment reports from experts such as doctors for their interpretation of claims data. It’s really important that an underwriter gets their analysis and conclusions for premium quotes right; they may put the business at risk if the premiums they offer are too high, but they still have to be reasonable enough in their estimations in order to attract and keep hold of customers.
As such, underwriters have to be tough cookies when it comes to making decisions! They have to be able to negotiate their quotes with insurance brokers, and be confident to write accurate policies which cover all necessary ground. It’s common for underwriters to specialise in a particular type of insurance, such as life insurance, insurance for businesses or general insurance like insurance for property.
How to get started in underwriting
Graduates can start off in this area as underwriting assistants or underwriting trainees, sometimes through a structured graduate scheme with an insurance firm. In some instances, school leavers could get into this field via an apprenticeship or school leaver assistant role.
The more experience you gain, the more complicated the risks you handle will become. Career progression could involve study for relevant qualifications such as Chartered Insurance Institute (CII) programmes to help work up to to more senior positions.