Becoming An Insurance Underwriter: South Africa's Guide

Insurance underwriters are professionals who assess and analyse the risks associated with insuring individuals and assets. They determine the pricing for accepted insurable risks. To become an insurance underwriter in South Africa, you will typically need a bachelor's degree in a field such as finance, business, accounting, law, economics, financial services, business science or business administration. Some entry-level positions may be available with just a high school diploma and relevant work experience. Gaining professional experience and certifications can also help you advance your career and move into senior roles.

Entry requirements: a bachelor's degree in a relevant field, such as finance or accounting

A bachelor's degree in a relevant field, such as finance or accounting, is often a requirement for entry into the field of insurance underwriting. This role involves assessing and analysing the risks associated with insuring individuals and assets, and determining pricing for accepted insurable risks.

A degree in finance, business, management, law, economics, or accounting is a good foundation for a career in underwriting. For those interested in pursuing a career in insurance underwriting, developing strong mathematical and analytical skills is crucial. This can be achieved by taking advanced-level math courses, joining relevant clubs, and participating in job shadowing and internship opportunities in the insurance field.

While some entry-level positions may not require an advanced degree, a bachelor's degree in a relevant field is typically the minimum requirement for becoming an insurance underwriter in South Africa. This educational background provides a solid understanding of business procedures and practices, as well as strong math and analytical skills, which are essential for the role.

In addition to a bachelor's degree, gaining professional experience and seeking relevant certifications can also enhance one's qualifications for insurance underwriting positions. Entry-level positions within insurance organisations or internships can provide valuable industry knowledge and help develop the necessary skills for underwriting roles.

Overall, a combination of a bachelor's degree in a relevant field, strong mathematical and analytical skills, and industry knowledge through experience or internships, can set a strong foundation for a career in insurance underwriting in South Africa.

On-the-job training: work under senior underwriters to learn the basics

On-the-job training is a crucial aspect of becoming an insurance underwriter in South Africa. Here are some detailed instructions and insights for learning the basics under the guidance of senior underwriters:

• Duration and Structure: Beginning underwriters in South Africa and worldwide typically undergo on-the-job training for a few months to up to 12 months. During this period, you'll be closely working with and learning from senior underwriters or analysts who will supervise your work and provide valuable guidance.
• Understanding the Basics: The initial phase of your on-the-job training will involve familiarising yourself with the basics of underwriting. This includes learning about the insurance industry, relevant regulations, and the company's policies and procedures. You'll also start processing simple insurance applications, gradually progressing to more complex ones as your training advances.
• Software Proficiency: Insurance underwriters routinely use specialised software to analyse risks and make informed decisions. During your training, you'll become proficient in using these software tools to process applications, assess risks, and generate recommendations. This technical aspect is crucial, so make sure you're comfortable with the relevant computer programs.
• Learning Risk Assessment: Risk assessment is at the core of underwriting. Under the guidance of senior underwriters, you'll learn how to calculate risks accurately. This involves evaluating an applicant's background, studying insurance proposals, and liaising with professionals to make informed judgements. Senior underwriters will teach you how to weigh various factors and make prudent decisions.
• Developing Interpersonal Skills: Effective communication and interpersonal skills are essential for underwriters, as they frequently collaborate with colleagues and clients. During your training, pay attention to how senior underwriters interact with others, resolve queries, and negotiate terms. This will help you cultivate the necessary soft skills for your role.
• Ethical and Professional Conduct: The insurance industry has strict ethical guidelines and professional standards. As you learn the ropes, your senior colleagues will impart the importance of confidentiality, professional ethics, and maintaining the company's reputation.

Remember, on-the-job training is a fantastic opportunity to absorb knowledge, ask questions, and gain practical insights into the world of insurance underwriting. Embrace feedback, be receptive to guidance, and make the most of your time learning from experienced underwriters.

Certification: gain insurance underwriting certifications to advance your career

Although it is not always necessary to have a certification to get an entry-level job as an insurance underwriter in South Africa, earning one can open doors to higher-level job positions, such as senior underwriter or analyst roles.

Various organisations offer certification programmes, and your choice may be influenced by your employer's preferences and your specific area of insurance expertise. For example, if you have at least two years of work experience, you may qualify to pursue the Chartered Property and Casualty Underwriter (CPCU) certification administered by The Institutes. This designation requires you to complete a series of online courses and virtual exams. The Institutes also offer several other certification options, such as the Associate in Commercial Underwriting (AU) or the Associate in Insurance (AINS).

Other types of insurance certification options are available through the National Association of Insurance and Financial Advisors and the American College of Financial Services. They offer the Life Underwriter Training Council Fellow (LUTCF) designation and the Chartered Life Underwriter (CLU) certification, respectively.

If your employer requires you to earn a certification, they may pay the associated fees or allow you to use work hours to study the course material and take the exams. Even if your employer doesn't require certification, you may be able to negotiate for fee reimbursement with your human resources department.

Earning an advanced certification can prove your expertise and potentially increase your value as an employee. You may be better positioned to interview for senior-level positions and negotiate raises. Remember that you may need to periodically renew your certification.

Skills: analytical reasoning, problem-solving, attention to detail, and interpersonal skills

Analytical reasoning, problem-solving, attention to detail, and interpersonal skills are all highly prized in the insurance underwriting profession. These skills are essential for underwriters to effectively assess and analyse the risks associated with insuring individuals and assets.

Analytical reasoning and problem-solving skills are crucial for underwriters when evaluating insurance applications and making decisions about whether to approve them. Underwriters must be able to assess the risk involved in insuring a client by screening applicants based on set criteria and using automated software to determine the risk level. They need to weigh up a number of factors and ask for detailed information from prospective clients to make informed decisions.

Attention to detail is vital as underwriters need to stay focused when reviewing insurance applications, as each item may affect the coverage decision. Creating accurate insurance policies and rates requires a keen eye for detail, as underwriters must consider the financial details of potential clients to calculate the cost-effectiveness and potential risk of insuring each client.

Interpersonal skills are also important for underwriters as they need to communicate and relate well with people. Their work involves dealing with clients, insurance sales agents, and other professionals to acquire more information and make informed decisions. Collaborating with colleagues and fostering a good team spirit are essential for success in the role.

Career development: gain experience and certifications to progress to senior roles

Gaining experience and certifications is key to progressing to senior roles in insurance underwriting. While a bachelor's degree is the minimum requirement to enter the field, gaining experience and certifications can help you stand out and advance your career.

Gaining Experience

Entry-level insurance underwriters typically work as trainees or assistants under the supervision of senior underwriters. This period allows new underwriters to learn the basics of the job, including how to review insurance applications, analyse information, and make decisions using underwriting software. After gaining a couple of years of experience, you may want to consider pursuing certifications to enhance your career prospects.

Obtaining Certifications

Although not always required, obtaining certifications in insurance underwriting can significantly boost your resume and make you a more competitive candidate for senior roles. Certifications demonstrate to employers that you understand the basic techniques, principles, and software tools of underwriting. They can also help you specialise in a particular type of underwriting, such as health, life, or professional liability insurance.

There are several certifications specifically for insurance underwriters, including:

• Chartered Property and Casualty Underwriter (CPCU)
• Associate in Commercial Underwriting (AU)
• Associate in Insurance (AINS)
• Life Underwriter Training Council Fellow (LUTCF)
• Chartered Life Underwriter (CLU)

In addition to these, there are also more general business and accounting certifications that can improve your knowledge and efficiency as an insurance underwriter, such as the International Accredited Business Accountant (IABA) certification.

Returning to School

For those aspiring to senior-level positions, returning to school to obtain a Master of Business Administration (MBA) after gaining a few years of work experience is an option. This can provide a competitive advantage and enhance your career prospects.

Frequently asked questions