Insurance underwriters are the main connection between an insurance company and an insurance agent. Using computer software programs, they evaluate insurance applications and determine whether an applicant should be approved for a policy, coverage amount, and premiums. Insurance underwriters analyze a candidate’s risk factors such as medical documents and financial situations.
Watch a video to learn what an insurance underwriter does.
How to Become an Insurance Underwriter
Insurance underwriters usually need a bachelor’s degree with courses in economics, business, math, and finance. However, candidates that have strong computer skills and a background in insurance-related work may be considered for employment. Once hired, new hires usually train under an experienced underwriter.
Most employers expect an underwriter to take coursework to become certified because of the importance of remaining current in new technology, changes in state and federal regulations, and new insurance policies. Institutes offer the Charter Property and Casualty Underwriter (CPCU) designation for those with 3 years experience and offer a training program for new underwriters.
Job Description of an Insurance Underwriter
Insurance underwriters determine whether to provide insurance to a candidate and under what terms to include such as coverage amounts and premiums. They must take the information of the candidate and enter it into their computer software program, evaluate the recommendations provided by the program, and make a decision on whether to approve or reject an applicant.
They must determine the client’s risk based on information such as credit score and medical documents. They investigate an applicant further and if necessary contact medical or field representatives for more information that would be relevant to the client. Typically, insurance underwriters specialize in either casualty, life, or health insurance. They normally work in offices full-time.
Insurance Underwriter Career Video Transcript
For every insurance policy written, there is an insurance underwriter behind the scenes. They balance the risk of their company paying out a claim by deciding how much coverage the company should provide and at what cost to earn a profit. Underwriters evaluate insurance applications and determine whether the company should approve an application, or decline to offer an insurance policy when the risk is too high. Most insurance underwriters specialize in one of three areas: life, health, or property and casualty insurance.
The work in each field is similar but the critical information differs. They may consider an applicant’s age and financial history for life insurance and the driving record and annual mileage for auto. For simple policies, underwriters enter client information into software that provides recommendations. Underwriters consider these in their final decision or may need to gather more information. For more complex types of insurance, underwriters rely on their own research and analytical insight.
Insurance underwriters tend to work full time in an office setting, although they may be required to handle customer inquiries or travel to assess properties. While related work experience and computer skills may be enough for some positions, employers tend to prefer candidates with a bachelor’s degree. Starting out, new underwriters work under the supervision of senior underwriters. Gaining certifications through ongoing coursework is expected in many positions, and required for advancement.
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Insurance Underwriters.
National Center for O*NET Development. 13-2053.00. O*NET OnLine.
The career video is in the public domain from the U. S. Department of Labor, Employment and Training Administration.