Most insurance companies whether they be home, motor, pet – tend to be underwritten by another company who determine the price of their policies. To build up a better picture of what factors are taken into account when generating people’s premiums – we spoke to an underwriter directly. Say hello to Julie Hughes from MarkerStudy!
- Could you tell us a bit about what an Underwriter is and what part you play in the insurance industry?
An Underwriter accesses the risk presented and applies rates and terms in order to compensate a client should they sustain a financial loss which is defined within the terms of an agreed policy wording. My role is to monitor account performance in terms of growth and profitability by constantly reviewing the rates and terms whilst ensuring we remain compliant with our regulators and treat our customers fairly.
- How long have you been in this profession and what was it that made you to decide to pursue a career in it?
I will be coming up for 30 years in March. I knew I wanted to go into clerical work like banking or insurance. An insurance job came up and have never looked back. I have progressed up through the ranks over the years and find niche schemes interesting and varied.
- What main factors are taken into account when working out car insurance?
The main factors are the driver’s age, the vehicle type & value, the area it is garaged in as well as any previous claims or conviction history.
- Are there any other factors which affect people’s premiums?
There may be other factors as well such as the type of licence held and how long they have held it, if the vehicle has been modified to enhance its value or performance, what the vehicle is used for and the drivers occupation depending on the product.
- What makes a young driver higher risk in comparison to other age groups?
It is down to the inexperience of driving and anticipation of other road users, on average the cost and frequency of claims is higher.
- Why are insurance premiums going up?
This is down to inflation of claims and expenses. Insurance also goes in cycles where insurers reduce rates to become competitive in the market and rises occur when an insurer cannot continue with an account that may be a loss – making premiums go up. Other insurers follow and hence the market generally rises. There is also Insurance Premium Tax which is a levy imposed by the government which insurers have no control over.
- How would you determine the risk of driverless cars when they become more popular?
I think this will become more of a products liability issue against the vehicle manufacturer rather than down separate motor insurance being required.
- Finally, do you have any advice for someone looking to get into an Underwriting role?
You need to be a good all-rounder really, it is a combination of clerical tasks and being a good communicator with people. Having a good grasp of the English language for policy wordings and excel in respect of the analytical work together with good common sense will help.