Underwriter Job Description
Underwriters help insurance companies around the world calculate and manage risk in a variety of ways. Underwriters are almost exclusively employed by the insurance industry, and most are employed full time. The role is perfect for anyone who enjoys learning about insurance and using numbers and figures to make important decisions. Insurance underwriters usually start off as entry-level employees, but as time progresses they may have the opportunity to assume more senior roles.
Underwriter Duties and Responsibilities
The duties of an underwriter vary from company to company. They’re also influenced by factors such as prior experience and job performance. Despite these factors, the majority of underwriters are responsible for the following tasks:
Insurance companies receive countless applicants on a regular basis. Unfortunately, they are not always able to provide everyone with coverage. Underwriters often screen applicants and make decisions as to whether the company should offer coverage based on criteria set forth by the company.
Calculate Premiums and Coverage Amounts
If an applicant is approved for coverage, the insurance company will need to decide how much they should pay and how much coverage they should receive. Underwriters are responsible for deciding this, and they often use various mathematical formulas to do so.
Insurance companies depend on premiums to generate revenue, not payouts. Some insurance applicants are more likely to file claims than others, and from a business perspective, applicants who are more likely to file numerous claims do not make good policyholders. Underwriters seek to identify high-risk applicants for their employer.
Contact Third Parties
When deciding whether to deny or offer insurance coverage to an individual, underwriters may need to reach out to a third party to obtain information about an applicant. They may need to contact physicians and field representatives to gain access to this information.
Collect Insurance Data
Underwriters may need to provide their superiors and other departments with the insurance data they collect. They often provide this data in the form of reports so executives and other departments can figure out how to increase revenue or retain existing customers.
Underwriter Skills and Qualifications
The skills and qualifications an underwriter needs to enter the job market vary from place to place. However, there are certain qualities and abilities most underwriters need to obtain a job. Insurance companies often seek underwriters with the following professional and personal traits:
- Understanding of insurance practices – insurance is a vast and complex industry, and insurance policies come in a wide variety of forms. To be successful, underwriters need an in-depth understanding of this industry as well as its practices and expectations
- Knowledge of mathematics – underwriters perform a variety of calculations on a regular basis, and even though they may use software to assist them, they should understand the fundamental concepts behind these formulas and calculations
- Computer skills – modern underwriters utilize computer programs and applications to perform their jobs. They should know how to install and uninstall software, send emails, and use various insurance and risk management programs
- Attention to detail – insurance underwriters are often tasked with handling large amounts of data and information, and a single mistake can result in a high-risk applicant receiving coverage. Underwriters should be able to focus and maintain their concentration for extended periods of time
- Communication skills – underwriters often communicate with other insurance professionals and applicants. Clearly conveying an idea verbally and on paper is essential
Underwriter Education and Training
Individuals who wish to enter the underwriting industry need at least a bachelor’s degree. A specific bachelor’s degree is not required (few colleges and universities offer insurance degrees), but most companies prefer applicants with a degree in a business or mathematics-related field such as finance, economics, management, or statistics. Entry-level underwriters may be able to obtain employment without experience, but they usually receive a significant amount of on-the-job training before they are allowed to work independently. They also need to learn about the insurance industry prior to entering the field.
Underwriter Salary and Outlook
According to the Bureau of Labor Statistics (BLS), the median annual wage for an underwriter is $69,760. Underwriters in the top 10th percentile earn more than $123,660 annually, while those in the lowest 10th earn less than $41,800. Underwriters employed full time typically have access to employment benefits such as health insurance, vision insurance, and paid time off.
The employment rate for underwriters is expected to exhibit a 5 percent decrease through 2026. This is much lower than the national growth average of 7 percent for all professions. This decline is largely attributed to the creation of software that allows insurance companies to make coverage decisions automatically.
Does the prospect of working as an underwriter excite you? If the answer is yes, the following career resources may be beneficial:
Group Underwriters Association of America – as its name suggests, GUAA is a professional organization dedicated to providing insurance underwriters and the general public with relevant industry information. Its website offers information about annual events, membership, and various educational resources
Insurance Underwriter Red-Hot Career Guide – packed with more than 2,500 real-life job interview questions and answers, this book is perfect for entry-level underwriters looking to break into the industry. Part of the Red-Hot Career Guide series, Insurance Underwriter provides practical career tips to anyone hoping to land their dream job as an underwriter
Underwriting: The Craft of Imagining – Underwriting uses humor and real-world examples to help readers learn more about both the insurance industry and its reliance on underwriters. Author Ugo Serena also explores harder topics, such as risk management and pricing, in an easy-to-read manner
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