Insurance Underwriters: Salary, career path, job outlook, education and more
- Education Required
- Most employers prefer to hire applicants who have a bachelors degree. Although a specific major is not required, some coursework in business, finance, economics, and mathematics is helpful.
- Training Required
- Beginning underwriters usually work as trainees under the supervision of senior underwriters. Trainees work on basic applications and learn the most common risk factors. Some companies offer training programs that include classroom instruction on the basics of underwriting.
- Job Outlook
The projected percent change in employment from 2016 to 2026: -5% (Decline)
(The average growth rate for all occupations is 7 percent.)
- Employers often expect underwriters to become certified through coursework. These courses are important for keeping current with new insurance policies and for adjusting to new technology and changes in state and federal regulations. Certification is often necessary for advancement to senior underwriter and underwriter management positions. Many certification options are available.
- Median pay: How much do Insurance Underwriters make?
- $67,680 Annual Salary
- $32.54 per hour
Insurance underwriters decide whether to provide insurance, and under what terms. They evaluate insurance applications and determine coverage amounts and premiums.
What do Insurance Underwriters do?
Insurance underwriters typically do the following:
- Analyze information stated on insurance applications
- Determine the risk involved in insuring a client
- Screen applicants on the basis of set criteria
- Evaluate recommendations from underwriting software
- Contact field representatives, medical personnel, and others to obtain further information
- Decide whether to offer insurance
- Determine appropriate premiums and amounts of coverage
- Review and update the rules that govern automation software
Underwriters are the main link between an insurance company and an insurance agent. Insurance underwriters use computer software programs to determine whether to approve an applicant. They take specific information about a client and enter it into a program. The program then provides recommendations on coverage and premiums. Underwriters evaluate these recommendations and decide whether to approve or reject the application. If a decision is difficult, they may consult additional sources, such as medical documents and credit scores.
For simple and common types of insurance, such as automobile insurance, underwriters can typically rely on automated recommendations. For more specific and complex insurance types, such as workers compensation, underwriters need to rely more on their own analytical insight.
Underwriters analyze the risk factors appearing on an application. For instance, if an applicant reports a previous bankruptcy, the underwriter must determine whether that information is relevant to the policy being applied for. The underwriter would likely consider how far in the past the bankruptcy occurred and how the applicants financial situation has changed since the applicant filed for bankruptcy.
Insurance underwriters must achieve a balance between risky and cautious decisions. If underwriters allow too much risk, the insurance company will pay out too many claims. But if they dont approve enough applications, the company will not make enough money from premiums.
Most insurance underwriters specialize in one of three broad fields: life, health, and property and casualty. Although the job duties in each field are similar, the criteria that underwriters use vary. For example, for someone seeking life insurance, underwriters consider the persons age and financial history. For someone applying for car insurance (a form of property and casualty insurance), underwriters consider the persons driving record.
Within the broad field of property and casualty, underwriters may specialize even further into commercial (business) insurance or personal insurance. They may also specialize by the type of policy, such as for automobiles, boats (marine insurance), or homes (homeowners insurance).
Careers for Insurance Underwriters
- Automobile and property underwriters
- Bond underwriters
- Insurance analysts
- Insurance writers
- Underwriting account representatives
- Underwriting service representatives