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The role of an Insurance Underwriter

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Insurance underwriting is a critical role within the General Insurance profession. From complex risk mitigation to determining appropriate premiums for various policies, insurance underwriting involves data analysis, risk evaluation and complex decision making. While typically employed by insurance companies, underwriters may also work for brokerage firms, banks, and other financial institutions. With a primary goal of ensuring company-wide financial stability and profitability, underwriters balance the risk of loss against premiums charged for various insurance policies.

The job of an Insurance Underwriter is complex, requiring specialist technical knowledge and analytical skills. Underwriters must be able to evaluate and assess several risk factors such as; age, health, occupation, and past claims history to determine the likelihood of a claim being made on a policy. They must then be able to assess the potential cost of a claim and determine the appropriate premium to charge for the policy. While the role can be quite demanding, it’s also extremely rewarding. The skillset required for successful underwriting isn’t completely niche, with employers continuing to focus on strong soft skills.

“We find the professionals who are most qualified and experienced to perform the role, are those who are thorough, forward-thinking, detail orientated and mindful.”

Ian Kennelly, Regional Manager, General Insurance.

What skills are required for the role?

Professionals who are mathematically proficient and analytically driven with a strong attention to detail are typically in-demand for the role. Professionals must also be able to pay close attention to detail, as even small errors in analysis can have significant consequences. While working well under pressure and meeting tight deadlines could be considered broad skillsets, these are indispensable in insurance underwriting.

Alongside these skills, excellent collaboration, client management and organisation are also extremely important for the role. Influencing and negotiation skills are also key, given that so many underwriters will need to work with people and businesses from a range of backgrounds and industries.

Successful insurance underwriting also demands excellent communication skills, as there is often a need to explain complex policies and decisions to policyholders and brokers. Those in the role must be able to communicate complex technical information in a clear, concise manner and work collaboratively with other departments, such as claims or sales teams, to provide an excellent customer service.

Embracing technology to further underwriting excellence

A key responsibility in the profession is ensuring that policies are financially sound and compliant with all applicable laws and regulations. It’s imperative that underwriters stay up to date on the latest industry trends and regulatory requirements to ensure that their company is operating in a responsible and ethical manner. While the underwriting process may have been fraught with repetitive and manual data management previously, recent technologies are revolutionising the process. This allows professionals to focus on more complex and strategic elements of the job. Aon’s Deputy Practice Leader Hal Shaw advises, “We need to view technology as something that can complement the trading experience, removing some of the more menial tasks [which will] allow us to focus on [delivering] best-in-class solutions for...clients” (WRB Underwriting: Innovations and Challenges: Broker Q&A with Hal Shaw).

One major change to the profession, with the introduction of Artificial Intelligence, is the digitisation of the underwriting process. McKinsey & Company report that, “even the leading insurers can see loss ratios improve [by] three to five points, new business premiums increase [from] 10 to 15 percent, and retention in profitable segments jump 5 to 10 percent, thanks to digitized underwriting” (McKinsey & Company: How data and analytics are redefining excellence in P&C underwriting). While some people might be averse to change and cautious when it comes to AI, it’salready proving an invaluable tool for businesses that are ready to modernise, streamline and improve the customer experience. Recently, Ignite Insurance Systems launched a “super-advanced artificial intelligence bot” to answer insurance customer queries (Insurance age: A major breakthrough’ - ChatGPT bots to revolutionise broker customer service). This has optimised the company's communication platforms, enabling customers to access relevant information instantly, allowing brokers to focus on the technical element of their roles.

These advances are mobilising rapid changes and improvements to the profession, enhancing job satisfaction and professional development.

A dynamic field, there are many opportunities for advancement in the specialism. Underwriters may choose to specialise in a particular insurance avenue such as Life or Property insurance, while others may pursue Liability. With the right skills and experience, some may even choose to start their own insurance company or brokerage firm.

In summary, the role of an insurance underwriter is a crucial one, requiring specialist knowledge of the insurance market, strong analytical and communication skills, plus the ability to liaise collaboratively with businesses and clients. Underwriters play a vital role in ensuring policies are financially sound and compliant with all applicable regulations, staying up to date on the latest industry trends and developments. For confident analytical thinkers and those who are passionate about risk management, insurance underwriting is a challenging yet rewarding career with extensive opportunities for advancement and continuous growth.