Underwriting interview prep.

An underwriter is the steward of the loss ratio: select risks, price to rate adequacy, set terms, and manage a book to an underwriting profit (combined ratio under 100).

What interviewers look for

  • Can the candidate assess a risk systematically (perils, exposure, COPE, loss history) and land a clear accept / decline / refer recommendation?
  • Do they price to RATE ADEQUACY, loss cost + expenses + profit load, and target a combined ratio under 100, not just match the market?
  • Do they show discipline: declining underpriced risks, applying terms, and walking away in a soft market?
  • Do they think portfolio-level, accumulation / catastrophe exposure, reinsurance, and the loss ratio of the whole book, not just one risk?
  • Do they read the underwriting cycle (hard / soft) and adjust appetite, and communicate decisions commercially to brokers?
  • Are they process- and compliance-disciplined: referral authority, documentation, and the regulatory / rate-filing frame?

Behavioural questions to expect

  1. Walk me through your CV.

    What it tests: Story coherence + genuine fit for risk work. Underwriting teams want evidence of analytical judgment, attention to detail, and comfort making accept / decline decisions with incomplete information, not a pure sales or pure number-crunching mindset.

  2. Tell me about a difficult risk or analytical decision you've made.

    What it tests: Judgment under uncertainty + the willingness to make a call and defend it. Tests whether the candidate weighs evidence, reaches a recommendation, and communicates it, the core underwriting act.

  3. Tell me about a weakness, a failure, or feedback you've received and worked on.

    What it tests: Self-awareness + risk discipline. Cross-role canonical. Fake weaknesses downgrade immediately. Underwriting losses surface over years, so honesty about a judgment error and the process fix matters.

  4. Why underwriting, and why insurance?

    What it tests: Authentic fit for risk selection: analytical judgment, decision ownership, and stewardship of profitability, vs sales (which sells the policy) or claims (which pays it). Tests whether the candidate is drawn to the risk-and-price problem.

  5. Which line of business would you want to underwrite, and why?

    What it tests: Genuine interest + basic grasp of how that line's risk works. Tests whether the candidate has a reasoned preference (personal vs commercial vs specialty P&C; life / health) rather than a random one.

  6. Why this firm?

    What it tests: Whether the candidate has done the homework. Bar: firm-specific evidence from the lines, appetite, performance, and people, not generic 'strong carrier'.

  7. How would you describe this firm's book and underwriting approach in your own words?

    What it tests: Whether the candidate has internalized HOW the carrier makes an underwriting profit, its lines, appetite, and discipline, not just that it 'sells insurance'. Tests whether they read its results / appetite.

  8. How does an insurance carrier actually make money, underwriting vs investment income?

    What it tests: Whether the candidate understands carrier economics: underwriting profit (combined ratio under 100) plus investment income on the float, and that disciplined underwriting is the controllable lever.

Technical concepts to master

The underwriting decision

Risk selection
Choosing which risks to accept and on what terms, so the book's expected losses stay within the priced-for level.
Accept / decline / refer
The decision set: accept (as-is or with conditions), refer up the authority chain, or decline.
Terms + conditions
The structure of the policy: limits, deductibles / retentions, exclusions, and coverage scope that shape the risk taken.
Underwriting authority + referral
The limits within which an underwriter can bind risk; beyond them, the risk must be referred to a senior / specialist.

Pricing + rate adequacy

Loss cost
The expected cost of claims for a risk, frequency x severity, before expenses and profit.
The premium build
Technical premium = loss cost + expense load + profit / contingency load.
Rate adequacy
Whether the charged rate covers the expected loss cost, expenses, and a profit margin over time.
Technical vs market price
The technically adequate price vs what the competitive market will actually pay.

Underwriting profitability + ratios

Combined ratio
Loss ratio + expense ratio; under 100% means the book makes an underwriting profit before investment income.
Loss ratio + LAE
(Losses + loss adjustment expense) / earned premium, the cost of risk and of settling claims.
Frequency x severity
Expected loss cost decomposes into how often claims happen (frequency) and how big they are (severity).
Reserves + IBNR
Money set aside for claims already incurred, including IBNR (incurred but not reported); reserve adequacy drives reported results.

Reinsurance + the underwriting cycle

Treaty vs facultative reinsurance
Treaty covers a whole class of business automatically; facultative covers a single, specific risk negotiated individually.
Retention + attachment
The carrier retains losses up to its retention; reinsurance attaches above it, absorbing larger losses.
Accumulation + catastrophe
The risk that many policies suffer losses from one event (a hurricane, a quake); managed via limits, spread, and cat reinsurance.
The underwriting cycle (hard / soft)
Soft market: rates fall, terms broaden, capacity is plentiful. Hard market: rates rise, terms tighten, capacity contracts.

Practical drills

  • A book earns $200m premium, incurs $130m losses + $10m LAE, and $52m underwriting expenses. (a) Loss ratio, expense ratio, combined ratio? (b) Is it an underwriting profit? (c) Roughly what rate increase would bring the combined ratio to 98%, holding losses and expense dollars flat?
  • A submission comes in for a risk in the carrier's line. Walk me through how you'd assess it and what you'd recommend. Be ready to be probed on the perils, the price, and the terms.
  • Your rating plan says the technically adequate premium for a risk is $120k (loss cost $80k + expenses + profit load). The broker says the market will only pay $95k, and you have a premium-growth target. Do you write it, and on what terms?

Smart-question anchors

  • Appetite + lines - what the carrier writes, where it's growing vs remediating, and the target combined ratio
  • Authority + process - underwriting authority levels, the referral structure, and how submissions flow
  • Pricing + tools - rating plans, predictive analytics, and how rate adequacy is monitored
  • Portfolio + reinsurance - accumulation / catastrophe management and the reinsurance programme
  • The cycle + appetite - where the carrier sees the market and how appetite is changing

Related roles

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