Insurance underwriters work for providers of health insurance, mortgage insurance, personal property insurance, and
term life insurance quotes. Underwriters work in the interest of the insurance company to assess the risk of providing coverage to individuals and businesses, offering coverage to those they deem an appropriate risk, writing those policies, and determining premiums.Insurance Underwriters
Insurance underwriters use sophisticated software programs called “smart” or “automated underwriting systems” to enter information specific to each applicant for insurance coverage, generating a risk profile tailored to screen potential policyholders based on a number of factors. For health and life insurance, information is culled from medical histories, demographics, lifestyle, current health, and type of employment. For property insurance, underwriters look at geographical location, use, and renovations or safeguards installed. For mortgage insurance, relevant data comes from credit score, employment history, and financial records. Underwriters then evaluate the risk score the software generates and decide whether to offer coverage.
Group policies in health and life insurance are a growing trend, so some underwriters specialize in designing contracts that average the individual risks of the group into one policy which covers everyone. Another kind of group policy, like casualty insurance, allows individuals to have tailored policies as part of a group premium. Underwriters who work in the casualty and property insurance field often specialize in personal or commercial insurance and then have a sub-specialty within that category, such as fire, flood insurance, homeowner’s, marine, renter’s, or vehicle insurance. Some insurance underwriters work in positions that combine these roles.
Most insurance underwriters work a standard 40-hour week in an office setting. Some travel if their particular field requires on-site inspections.
Education, Training, and Essential Skills
Most employers prefer job candidates with a bachelor’s degree in business administration or finance or any degree coupled with relevant coursework in accounting, statistics, and business law. Significant experience in insurance underwriting can also substitute for field-related formal education.
Most insurance underwriters are hired for entry-level positions as assistants or trainees and learn by working with more experienced employees. Larger employers commonly offer on-the-job training programs, including ongoing refresher skills in underwriting software, which is constantly being improved. As underwriters gain experience, they are eligible for higher-paying positions with more responsibility.
All insurance underwriters require a set of skills to be successful, including familiarity with field-related software, computer fluency, research, analytical, and communication skills.
Advancement and Professional Development Opportunities
Insurance underwriters can advance by taking positions with increased responsibility, by taking managerial positions, and by developing themselves further professionally by continuing their education and earning additional certifications. Additionally, some insurance underwriters may decide to become insurance agents or brokers.
Constant changes in insurance law, government regulations, and updates in underwriting software make continuing education and professional development essential for insurance underwriters. Professional organizations, such as the Insurance Institute of America, the American Institute for Chartered Property Casualty Underwriters, and the American College, offer a variety of skill-enhancing training programs for new and experienced underwriters. These organizations offer industry-recognized certifications and designations, such as Associate in Commercial Underwriting (ACU), Associate in Personal Insurance (API), Chartered Property and Casualty Underwriter (CPCU), Chartered Life Underwriter (CLU), Registered Health Underwriter (RHU), and Life Underwriter Training Council Fellow (FUTCF).
Outlook and Income
Overall, the employment rate for insurance underwriters is expected to decrease by 4% over the next decade, driven by more efficient, automated insurance underwriting software, which eliminates the need for as many workers. Demand will be highest for insurance underwriters with computer skills and significant insurance-related work experience. High turnover will create openings for new positions, but lack of promotion or advancement opportunity in those positions will keep the job outlook on a downturn.
New insurance fields, like long-term care, product development, and catastrophe, are a few arenas where insurance underwriters can look for new opportunities
Annual median salaries for insurance underwriters are about $57,000, with the highest median above $100,000 and the lowest below $35,000. Median salaries for underwriters working in agencies and brokerages are similar to those working for insurance carriers. Many insurance underwriters enjoy salary incentives, paid professional development, and strong benefits packages in addition to their regular salaries.