What Is an Insurance Underwriter? (With Career Guide)
By Indeed Editorial Team
Updated 13 December 2022
Published 1 November 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
An insurance underwriter analyses and evaluates the associated risks with insuring persons and property. These professionals determine the rates for acceptable insurable risks. It's critical to conduct additional research on the profession before deciding on a career choice.
In this article, we discuss the answer to the question 'What is an insurance underwriter?', provide a skills guide for this role and list the certifications that may help you become a successful insurance underwriter.
What is an insurance underwriter?
If you're interested in the insurance field, you may wonder, 'What is an insurance underwriter?' An insurance underwriter is an individual responsible for evaluating insurance applications and deciding whether to accept or decline an application grounded on risk evaluation. They also provide risk analysis advice, make insurance recommendations for people and determine whether or not to cover current clients at the same level. Insurance underwriters often use specialist software to analyse data to help them make informed decisions.
How to become an insurance underwriter
Follow these steps to become an insurance underwriter:
1. Get an undergraduate's degree
Employers may seek candidates who have obtained an undergraduate degree in a relevant field. Vocational experience in an insurance firm alone might also be adequate for entry-level positions. Obtaining your senior high school credential or equivalent may allow you to enrol in degree programs. Bachelor degrees in the following courses may help you become an insurance underwriter:
business or business administration
probability and statistics
2. Get a job as an entry-level employee.
Consider applying for entry-level work after completing your bachelor's degree in a related discipline. You might find underwriter positions in various places such as brokerage businesses, insurance firms, organisations and credit intermediation. Take the time to explore your possible employers, their business values and career progression paths to evaluate which work environment provides you with the best chances.
3. Take part in an internship or trainee program
Insurance underwriters who have recently graduated or entered the profession may undergo considerable on-the-job training and coaching. Some university courses may allow you to complete an internship as part of your coursework. Underwriting students are usually paired with experienced underwriters to help them understand rules, methods and strategies. As a trainee, you might learn about typical risk variables and fundamental underwriting techniques. As you gain experience, you might feel prepared to operate alone and with greater responsibility.
4. Obtain your certification
Numerous employers encourage or may require employees to obtain underwriting certificates by enrolling in programs available through risk management and insurance firms. A degree in commercial underwriting or Associate in Personal Insurance is a common credential for junior underwriters. The coursework and examinations for these credentials typically take one to two years to complete. More advanced underwriters with at least three years' experience in the field may pursue the Property and Casualty Underwriter certification to progress their career.
5. Develop useful abilities
To appeal to prospective employers, you may develop and hone the technical skills that make you an effective insurance underwriter. These abilities could be acquired and developed through on-the-job training or online learning. To be an excellent underwriter, you may have capabilities such as mathematical and analytical skills, the ability to make rational decisions and possess computer skills.
What does an insurance underwriter do?
If you've wondered 'What is an insurance writer?', you've probably wondered about their duties and responsibilities. The majority of insurance underwriters focus on an area such as life, medical, assets and casualty insurance. Even though the job tasks in each industry are identical, the underwriting criteria used by these professionals differ. For instance, insurance underwriters may assess a person's age and financial background when considering life insurance. Underwriters might look at an individual's driving history when they apply for automobile insurance, a type of property and casualty insurance.
Underwriters serve as the primary interface between an insurance agency and its brokers. Insurance underwriters employ computer software systems to evaluate whether or not to authorise an insurance application. They insert precise information about a customer into a digital application. The computer then makes coverage and payment suggestions. Underwriters consider these suggestions before deciding whether to accept or decline the application. They might review alternate sources, including medical files and credit ratings, if a conclusion is unclear.
What is an insurance underwriter skill?
The skills and competencies required for an insurance underwriter include the following:
Essential math knowledge is a grasp of statistics and probability. A large part of the job entails calculating an appropriate rate for an individual based on the person's likelihood of filing a claim based on available data. This skill is vital in helping an insurance underwriter make the right decision.
Insurance underwriters analyse most data using industry-specific programs. They may learn to use the program proficiently and ensure they enter all data accurately. You may require considerable computer software skills and be accustomed to working with spreadsheet data to operate as an underwriter. Underwriters may conduct risk evaluations and other documents using an online program.
An underwriter might think critically to analyse data. They may use previous expertise reviewing various forms of data and comparing it to the insurance firm's criteria. While some decisions are straightforward, many scenarios have insurance underwriters weighing several variables of a particular application. Qualified underwriters may consider computerised proposals against their own best judgment.
Every candidate is unique, and each piece of data might have a varied influence on applications. Insurance underwriters try to use precision to analyse each detail and reach the correct conclusion. In addition to performing routine activities, an underwriter may pay close attention to the data they're examining and spot and rectify discrepancies in client information.
An underwriter might receive an insurance application for a piece of property. In this scenario, it's their job to visit the location and undertake a risk analysis there. Having the confidence to travel independently could be a significant component of this job.
Ability to make decisions
Your ability to think realistically and relate ideas to the objectives you're attempting to achieve is shown in your decision-making skills. Underwriters might be expected to weigh the costs and benefits of numerous options. This skill may assist them in selecting the best one.
In your career life, interpersonal skills are essential for communicating with groups and people. Insurance underwriters may use this skill to liaise with clients and other professionals, including insurance brokers. They may employ interpersonal skills to speak on the phone, face-to-face or via email.
What is an insurance underwriter career?
Some of the insurance underwriter roles include:
underwriters for automobiles and real estate
underwriting account managers
underwriting service representatives
What is an insurance underwriter's environment?
Insurance underwriters spend a lot of time at their desks. They may spend most of their working hours inputting or analysing data on computers. The majority of transactions take place with insurance brokers away from the computer. Insurance underwriters often work regular full-time hours during the weekdays of Monday to Friday. There is little need for insurance underwriters to work evenings or weekends due to the nature of their employment. These professionals might complete additional hours by extending their workday or working weekends to manage heavy workloads. There are times when part-time hours and flexible options are available.
What is an insurance underwriter's career path?
For those interested in a career in finance or insurance, underwriting is a fantastic option. Underwriters often earn a good income and have opportunities to progress in their careers. More advanced roles include senior insurance underwriter, team leader or manager of your department. You may also gain opportunities to connect to colleagues and clients as you seek sensible answers to any work-related matters. This position is also excellent if you enjoy a consistent work environment where you complete activities in an office and collaborate with clients and coworkers daily.
Related: How to Choose the Right Career Path
Insurance underwriter salary
An insurance underwriter earns an average of $80,581 per year. You may receive a better income if you work for a larger organisation compared to a smaller company. Some factors that could affect the salary of the insurance underwriter may include:
years of experience
Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location. Please note that none of the companies mentioned in this article are affiliated with Indeed.
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