How to Become an Underwriter

Insurance companies protect people, businesses, and companies from experiencing financial loss from detrimental occurrences. Underwriting is an important part of the insurance company to offer people and organizations insurance policies. Underwriters are the trained professionals responsible for this task.

What does an underwriter do?

Underwriters assess if an individual or organization is eligible to receive an insurance policy and determines the specific terms. They identify and determine the risk of loss from clients, determine who receives a policy, establishes the proper premiums, and write policies that assess the risks. Underwriters evaluate information on insurance applications to decide if a risk is acceptable. They cover many different aspects about the potential client depending on the type of insurance.

Underwriters use computer applications to handle risks in a precise and accurate manner. These computer systems evaluate and rate insurance applications, suggest acceptance or rejection, and regulate the premium rate according to the risk. These systems help underwriters make better thorough decisions and prevent excessive losses.

Most underwriters specialize in health, life, property and casualty, or mortgage insurance. Property and casualty underwriters typically specialize in personal or commercial insurance and then specialize in a type of risk including homeowners, fire, automobile, liability, worker’s compensation, or marine.

What kind of training does an underwriter need?

Most employers prefer underwriters who have a bachelor degree in finance, business administration with supporting courses in accounting. A bachelor degree in almost any area with supporting courses in accounting and business law may be sufficient for many positions. Most underwriters receive on the job training and start out as assistant underwriters or trainees. Numerous large insurance firms also offer work-study training programs. Most underwriters must complete continuing education to keep up to date on concepts related to the field.

What are the prospects for a career as an underwriter?

Employment of underwriters is projected to grow slower than average for all professions, increasing 6% from 2006 to 2016 (1). The slow growth is attributed to underwriting software, but new and emerging insurance fields will create a need for more underwriters.

Job prospects are expected to be good because of the high turnover rate. Job prospects will be the best for underwriters with extensive experience and a strong finance, communication, and computer background. Job opportunities will also arise from the need to replace workers who retire or leave the field.

How much do underwriters make?

As of July 2009, the middle 50% of underwriters earned annual salaries between $40,960 and $50,060. The highest 10% of underwriters earned annual salaries of more than $54,295 (2).

A career as an underwriter is an excellent choice for individuals who enjoy examining information and paying close attention to detail. Great interpersonal and communication skills are very important because underwriters deal with insurance agents and other professionals in the insurance field. Underwriters must also have good judgment to make good and thorough decisions.

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