Michael Faulkner says the results of the UK's biggest insurers show that training is key to underwriting success

' Two of the UK's biggest insurers have now put their names behind Insurance Times' Underwriting Discipline campaign. Last week, Norwich Union (NU) added its voice to the campaign, while Royal & SunAlliance has joined this week.

Both insurers have this week produced their interim results for the first six months of 2005. From the point of view of underwriting discipline they make interesting reading, showing strong performances by both companies. Both achieved improvements in underwriting result and combined ratio, even against the backdrop of a soft market.

In pledging its support for the Underwriting Discipline campaign, NU highlighted training as being vital to underwriting profitability.

Underwriting discipline will not be achieved by reliance on fancy new underwriting models, NU says, it will come from having well-trained, competent underwriting staff at all levels of the organisation - from junior front line staff to senior managers.

One insurance company recently undertook some research into pricing discipline throughout its regional offices and came to an important but unsurprising conclusion. The offices containing less skilled staff showed worse underwriting performance than those with skilled staff.

Despite being a rather obvious conclusion, it is surprising that the situation was allowed to arise in the first place.

With this in mind the case for properly training all underwriting staff cannot be understated.

The CII obviously has a role to play in this, but the companies themselves must create a culture of learning for all employees.

Of course, the FSA will clearly have an impact on this with its training and competency requirements, but good commercially-minded underwriting goes beyond this and it is up to insurers to make sure that employees have the necessary skills to do this.

The insurance industry is constantly striving to be seen as a profession, alongside the likes of lawyers and accountants. Here is a chance to demonstrate this. IT