If you've ever filled out an application for any sort of insurance, you've faced questions that the insurance company uses to determine the level of risk you pose, your premiums and the extent of coverage for which you are eligible. The person who reviews and evaluates your responses is an insurance underwriter. This job requires an individual who is thorough and decisive, with excellent analytical skills. If you have a background in finance and an eye for detail, you may want to consider insurance underwriting as a career.

What Does An Insurance Underwriter Do?

To underwrite means to accept liability for clients' potential losses. As such, underwriters review new or renew applications for insurance coverage, for both individuals and companies. With the help of computer programs, underwriters determine the risk involved in insuring a particular person or company and calculate the appropriate premiums for the amount of coverage requested. These are important decisions, as insurance companies assume billions of dollars of risk each year. If an underwriter is too conservative, an insurance company may lose business. If they are too generous, the company may need to pay excessive claims.

Underwriters work for insurance companies and they are typically located at the company's headquarters or a regional branch office. Underwriting is typically a desk job with a standard 40-hour workweek, although overtime may be required as determined by each underwriting project. Evening and weekend hours are not uncommon.

Working with computers and technology is a vital part of underwriting. Computer software systems are used to analyze and rate insurance applications, make recommendations based on risk, and adjust premium rates according to this risk.

Job Opportunities For Insurance Underwriters

There are many lines of work for insurance underwriters, but the four main fields are:

  1. Life insurance
  2. Health insurance
  3. Mortgage insurance
  4. Property/casualty insurance

The duties of an underwriter will differ with each type of insurance because both the types of clients as well as the level of risk will vary. To learn more about health insurance underwriting, for example, see the National Association of Health Underwriters. For information about property/casualty insurance check out the Insurance Information Institute.

The Tools Of The Trade

Most employers prefer candidates with a college degree or professional designation and some insurance-related experience. A bachelor's degree in almost any field may be sufficient to qualify a person to begin a career as an underwriter, but employers will probably prefer applicants with completed coursework in business, law, and accounting or work experience in the insurance and underwriting field.

The most important underwriting skills are learned on the job. As such, many underwriters begin their careers as trainees or assistant underwriters. During this time, they help collect and evaluate information about clients but are supervised by an experienced underwriter in the firm. Some large insurance companies offer their own comprehensive training programs, which typically include both study and the gradual assignment of more complex tasks.

Strong computer skills are essential to a career in underwriting. So, on-the-job computer training tends to continue throughout an underwriter's career as the programs that these professionals use are updated.

Certifications for Underwriters

As with other careers, certifications can improve earning power for insurance underwriters and open up new opportunities for advancement. Underwriters with experience and additional designations may advance to senior underwriter and managerial positions, although some employers require a master's degree to achieve this level.

Certifications for Insurance Underwriters
Field Certification Organization
Life Insurance Chartered Life Underwriter (CLU) The American College
Health Insurance Registered Health Underwriter (RHU) The American College
Personal Insurance Associate in Personal Insurance (API) Insurance Institute of America
Business Policies Associate in Commercial Underwriting (AU) Insurance Institute of America
Property/Casualty Chartered Property/Casualty Underwriter (CPCU) American Institute for Chartered Property/Casualty Underwriters

The AU and API designations both typically take at least a year to complete, while the CPCU designation requires three years of insurance experience and candidates must pass eight exams.

Show Me The Money

Statistics collected by the Bureau of Labor Statistics in 2018 show that insurance underwriters' average annual earnings are $69,380.

Further, insurance companies also may provide above-average benefits such as retirement plans and, of course, excellent group life and health insurance. They also may offer salary incentives and tuition reimbursement.

In Conclusion

Finding where you fit in the working world is often not a linear path; it is quite normal to try out a number of potential career opportunities. But if you're a detail-oriented, analytical person who likes to put the pieces together to solve a problem, then insurance underwriting could be a good career fit for you.