What does an insurance underwriter do? (With skills)
By Indeed Editorial Team
Published 30 April 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Insurance is one of the most lucrative industries in the world and is the functional backbone of industries such as motoring, real estate and even the film industry. Understanding risk to support clients through claims is one of the most important parts of the industry, requiring expertise for the most thorough completion. This is where an insurance underwriter's skills are critical. In this article, we discuss what insurance underwriters do, report their typical annual salary and explore some of the essential skills insurance underwriters possess.
What does an insurance underwriter do?
If you've ever wondered 'What does an insurance underwriter do?', then it might interest you to learn that an underwriter has a wide range of tasks in their day-to-day work, each of which impacts the success of the company. These duties vary significantly, with some occurring daily and others far less frequently. Below are some of the vital tasks insurance underwriters complete in their role:
Performing statistical analysis
One of the prime responsibilities of an insurance underwriter is completing statistical analyses. Insurance is an industry based on statistics, with prior data surrounding situations, such as road traffic incidents and illnesses, setting the standard costs of a range of different insurance policies. Effective insurance underwriters build a complete understanding of these types of factors. This gives them a comprehensive idea of the likelihood of incidents for a group of policyholders and they can adjust their prices and likely claims losses depending on these data.
As statistical analysis is a fundamental part of the role, many insurance providers make use of specifically designed statistical analysis software. This can allow insurance underwriters to find even greater insight in complex data fields, comparing information over time and across a range of metrics. Insurance underwriters can provide a greater level of insight and precision for their customers when using more detailed information and assessing it in the most thorough way possible.
Studying insurance proposals
Insurance underwriters study proposals from potential clients in significant depth. These proposals include anything from a motorist seeking insurance on their hatchback to a more highly-tailored issue, such as an actor ensuring their health throughout a film shoot, financially protecting the production from the consequences of a shutdown. Insurance underwriters typically specialise in specific industries, as it's difficult for any professional to have a thorough understanding of every single industry.
Specialisation is more common in markets in which claims are unique. For example, an insurance agent could automatically generate motorist policies based on the specific car and factors such as the age of the driver, as there's enough data for accurate extrapolation of data sets into one cohesive policy. Underwriters manually study insurance proposals in more specialised industries and regarding more premium items, as this enables them to create a more accurate policy that's appropriate for the specific situation. This is a less frequent task but an important one for any high-end insurance underwriter.
Liaising with specialists
While insurance underwriters may develop a high level of knowledge in a specific industry, there are many instances when an industry professional holds a better understanding of the situation. For example, an insurance underwriter turning to a specialist doctor in the event of a condition they don't understand can help guide better insurance policy writing. Although some underwriters are industry experts, turning to professionals with a far greater knowledge of the most specific issues is clearly beneficial for the insurance company's bottom line.
Liaising also refers to insurance underwriters having good connections and positive relationships with experts throughout the specific field. For example, an insurance underwriter focusing on the medical field benefits from knowing a cardiologist, as heart conditions play a significant part in the writing of life insurance policies. Insurance underwriters perform to a much higher standard when in contact with expert members of the relevant profession, such as doctors, mechanics and estate agents.
Keeping detailed records
Keeping detailed records of the behaviour and actions of customers is a key part of insurance underwriting. In the event that a customer has an incident, the insurance underwriter records every possible piece of information about the incident and adds it to the customer's record. When it's time to assess the customer's record during a policy renewal period, the underwriter can adjust the policy in accordance with the incident and ensure that the insurance provider doesn't take excessive risks in insuring the customer.
Recording this data is one of the most important tasks of insurance underwriters. Typically, they use specialised software, such as customer relations management programs, to record every detail of information surrounding the customer's insurance needs. Information is the most valuable asset an insurance underwriter has access to and recording information as thoroughly as possible can reduce the need for time-consuming investigations later due to gaps in a customer's record.
Finally, an insurance underwriter writes policies for their customers. This includes defining all the terminology within the policy, describing the details of the policy itself and detailing cases in which one of the two involved parties triggered the policy. This is the final product and the part of the insurance process a customer engages with and makes full use of in the event of an incident.
Although many policies follow a template, as represented by the similarity of car insurance policies across the market, some have far more specific requirements. In these cases, insurance underwriters write down each clause of the agreement, setting out the terms and conditions for both sides. Attention to detail is crucial, as one individual clause out of place might result in the difference between a well-written policy and one with a loophole.
What skills do insurance underwriters use in the workplace?
Because of the wide variety of tasks insurance underwriters complete, they use a significant range of skills. Each applies to different roles and developing these skills is essential for effective work as an insurance underwriter. Some of the fundamental skills these professionals use in the workplace include:
As collaborating with industry experts is one of the most important parts of high-quality insurance underwriting, communicating with a wide range of people is a core part of the job. This communication typically takes place through written mediums. Therefore, conveying information and asking the right questions are relatively simple processes. In addition, maintaining positive relationships with colleagues, customers and specialists can lead to better insurance underwriting over extended periods.
Analytical skills and the assessment of risk play key parts in the process of insurance underwriting. Setting the right level of cost for a policy ensures that people take out policies with the company and the company makes enough money to cover insurance payouts. An insurance underwriter using their analytical skills competently can have a positive effect on the company's profitability.
Due to the significant record-keeping requirements of the role, efficient insurance underwriters have a range of organisational skills that support their work. Keeping records in the right place and accessible is essential. This allows colleagues to access information about their clients consistently and the insurance policy selection process is significantly more efficient than with a disorganised insurance process.
Report writing skills
Report writing skills play a core role in the insurance underwriting process. As policy writing is a complex process featuring a range of technical writing abilities, having a high standard of report writing skills ensures that you provide the quality policies that the company relies on. The best insurance underwriters use formal writing in the creation of airtight policies that ensure profitability for the entire organisation.
How much does an insurance underwriter earn?
The national average salary of an insurance underwriter is £30,880 per year. This varies due to a range of factors, with specialisation playing a major role in the higher compensation packages of some insurance underwriters. An underwriter who is the best in their field within a specific area, such as the film industry, typically receives a higher rate of pay because of the quality of their services. They can save the insurance provider significant amounts of money in the event of an incident and maximise revenue from the client.
Salary figures reflect data listed on Indeed Salaries at the time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.
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