Underwriter job description: the decision, the authority limits and a template

Underwriting job adverts tend to describe a person: analytical, commercially minded, good with brokers. The job is narrower and harder than that. An underwriter decides whether the organisation takes a risk, on what terms, at what price, inside limits somebody else set.

This article sets out an underwriting position description: the decision at the centre of the role, nine duties, authority and referrals, what changes by class of business, the regulated layer, how underwriters are measured, and a template.

An underwriter is judged by a line manager, a portfolio owner and sometimes compliance at once. See how New Dynamics multi-manager reviews gather input from everyone involved in a person's work.

Two jobs share the word

• Insurance underwriting. Deciding whether to insure a risk, on what terms and at what premium. This is the role O*NET and Prospects describe, and the one this article covers in detail.
• Credit, mortgage or loan underwriting. Deciding whether to lend, how much and on what conditions, against affordability, security and policy rules.
• Securities underwriting. A different activity again: a bank agreeing to buy and distribute an issue of shares or bonds.

The skills rhyme and the job descriptions do not. Say which in the first line of the advert, because candidates in one do not transfer to another without retraining.

The decision at the centre

Everything else in the role exists to support four judgements:

1. Accept or decline. O*NET's Insurance Underwriters examine "documents to determine degree of risk from factors such as applicant health, financial standing and value, and condition of property", and decline "excessive risks".
2. Set the terms. Limits, exclusions, conditions, excess, warranties. Where the risk is substandard, underwriters "specify applicable endorsements or apply rating to ensure safe, profitable distribution of risks".
3. Price it. Calculate or agree the premium in line with the rating basis, appetite and the market.
4. Record it, or refer it. Write the decision down so that someone can reconstruct it, and pass it up when it exceeds your authority.

Nine duties

Prospects' insurance underwriter profile sets out the working week, and it maps to nine duties.

1. Gather the facts. Review applications and gather information "about the person, property, business or other risk to be insured".
2. Analyse. Analyse "data, claims history, financial information and specialist reports to assess the likelihood and potential cost of a claim", and review company records "to determine amount of insurance in force on single risk or group of closely related risks".
3. Decide, or refer. Decide whether to offer insurance "and whether higher-value or complex risks need to be referred to a senior underwriter, specialist team or reinsurer". O*NET adds authorising "reinsurance of policy when risk is high".
4. Price and set terms. Calculate or agree the premium and set "policy limits, exclusions, conditions and other terms, applying policy wording correctly", and help develop or amend wording.
5. Quote and negotiate. Prepare quotations and negotiate "cover, prices and terms with insurance brokers or customers".
6. Commission evidence. Arrange "surveys, medical evidence or other specialist assessments where more information is needed", and write to representatives or medical personnel to obtain further information.
7. Handle renewals. Review existing policies at renewal "and decide whether to continue, change or decline the cover".
8. Watch the portfolio. Monitor "the performance and profitability of individual accounts and wider portfolios of insurance business", including exposure to catastrophe.
9. Record and comply. Record decisions accurately and ensure they comply with "company policies, regulatory requirements and your level of underwriting authority".

Duty nine is the one that separates a good underwriter from a fast one. A decision nobody can reconstruct in two years is a problem waiting for a claim.

Authority, referral and the licence

The single most useful part of an underwriting job description is the authority section. Write down:

• The classes the underwriter may write.
• The limits: sum insured, premium, exposure, and any aggregate.
• The mandatory referrals: risk types, loss history, territories, occupations, or anything outside appetite.
• Who the referral goes to, and what turnaround the broker can expect.
• The wording authority: whether the underwriter may deviate from standard wording, and who approves it.

Where firms operate a personal underwriting authority or licence scheme, say that the role holds one, at what level, and how it is reviewed.

Classes, and what each changes

Prospects lists the main specialisms: commercial insurance "covering businesses, their property, activities and liabilities"; life and health, "covering risks such as illness, injury and death"; personal lines "such as home, motor, pet and travel"; reinsurance, "covering insurance companies against some of the risks they have accepted"; and specialist lines "such as aviation, marine, cyber and energy".

What changes between them is the evidence, the pace and the counterparty. Personal lines is high volume and heavily rules-driven; specialist lines is low volume, evidence-heavy and negotiated face to face; life and health depends on medical evidence and its own ethics; reinsurance works on portfolios rather than individual risks. State the class, then describe the work, because "underwriter" alone will attract all five.

The regulated layer

In the UK, insurance firms operate under the Senior Managers and Certification Regime, and some roles sit inside it. The FCA explains that the Certification Regime "covers specific functions that aren't Senior Management Functions, but can have a significant impact on customers and/or the firm". Certification staff "are not approved by the FCA. Instead, firms need to check and certify that they are fit and proper to perform their role on appointment and at least once a year", and firms must have processes "to obtain and provide regulatory references", with the FCA expecting a reference "within 4 weeks at most".

Whether a particular underwriting role is a certification function depends on the firm and the function, so check with your own compliance team rather than copying another advert. If it is one, say so in the job description, along with the annual fit and proper assessment and the reference requirements. This is general information rather than regulatory advice.

What the job description must state

• The class and the sub-class, plus typical risk size.
• The authority limits and mandatory referrals.
• Distribution: brokers, direct, MGA, delegated authority, or a mix.
• The systems and the rating basis used.
• Whether the role is regulated, and any certification or qualification requirement such as progress towards a professional insurance qualification.
• Who owns the portfolio result, which is often not the underwriter writing the business.

How underwriters are measured

• Loss ratio and portfolio result, understood with a lag and read alongside the class rather than on its own.
• Adherence to appetite and authority: referrals made when they should be, and no breaches.
• File quality: could another underwriter reconstruct the decision from the record?
• Service to distribution: quote turnaround and hit rate, which brokers experience directly.
• Renewal retention and rate achieved against plan.

Avoid making premium written the headline measure. It rewards saying yes, and the consequences arrive two years later in someone else's report. Our performance review guide covers assessing roles where the result lags the decision.

An underwriter job description template

Job title: Underwriter [class]

Reports to: [underwriting manager / class head]

Class: [commercial property / motor / life / cyber], typical size [range]

Distribution: [brokers / direct / delegated authority]

Purpose: Decide which risks we accept in [class], on what terms and at what price, within authority and appetite, and record those decisions so they can be understood later.

Responsibilities

• Review submissions and gather the information needed to assess the risk.
• Analyse claims history, financial information and specialist reports.
• Accept, decline, or refer risks in line with appetite and authority.
• Set limits, exclusions, conditions and premium, applying policy wording correctly.
• Prepare quotations and negotiate terms with brokers or customers.
• Commission surveys, medical or other evidence where required.
• Underwrite renewals and decide whether to continue, amend or decline.
• Monitor account and portfolio performance, including aggregation.
• Maintain accurate underwriting records and comply with policy and regulation.
• Support wording development and referrals from junior colleagues.

Authority: may accept up to [limit] for [risk types]; must refer [list] to [role].

Regulatory: [certification function yes or no], fit and proper assessment [frequency].

Frequently asked questions

What does an underwriter do?

Decides whether to accept a risk, on what terms and at what price. In insurance that means reviewing applications, analysing claims history and specialist evidence, deciding whether to offer cover or refer the risk, setting limits, exclusions and conditions, calculating the premium, negotiating with brokers, handling renewals and recording every decision.

What should an underwriting position description include?

The class of business and typical risk size, the authority limits and mandatory referrals, how business reaches the underwriter, the systems and rating basis, whether the role is regulated and any qualification requirement, and who owns the portfolio result.

What is underwriting authority?

The limits within which an underwriter may commit the insurer: which classes they may write, up to what sum insured or premium, with which risk types excluded, and what must be referred to a senior underwriter, a specialist team or a reinsurer. It is the core of the role and belongs in the job description.

What is the difference between an underwriter and an insurance broker?

An underwriter works for the insurer and decides whether to accept the risk and on what terms. A broker acts for the customer, presents the risk to insurers and negotiates cover on the customer's behalf. They talk constantly and are on opposite sides of the same transaction.

What qualifications does an underwriter need?

Employers usually ask for analytical ability and relevant experience rather than a specific degree, with professional insurance qualifications expected or supported as people progress. Where a role is a certification function under the UK regime, the firm must also assess that the person is fit and proper on appointment and at least annually.

How should an underwriter be measured?

On the portfolio result read with its lag and in the context of the class, adherence to appetite and authority including referrals made correctly, file quality good enough for someone else to reconstruct the decision, quote turnaround and hit rate, and renewal retention and rate. Premium written alone rewards accepting too much.

Your next step: write the authority section first

1. Name the class, sub-class and typical risk size.
2. Set out the limits and the mandatory referrals, with the destination for each.
3. Confirm with compliance whether the role is a certification function.
4. Decide what the underwriter is measured on before the first quarter, not after it.

For assessing roles where results arrive long after the decisions, read and download our performance review guide. The guide is free to read, and the PDF uses our short download form.

Want underwriting objectives, referrals and review input from more than one manager in one record? Book a New Dynamics demo and bring your current authority schedule. You can also email contact@new-dynamics.com.