Insurance Underwriter Job Description, Salary, and Skills
Insurance underwriters evaluate applicants for insurance. They determine whether or not a prospective customer should be insured and, if so, recommend an appropriate premium to take on that level of risk. Insurance underwriters use software to help analyze the risk profile of clients and to calculate costs.
Insurance underwriters work closely with insurance agents who have direct contact with customers and with actuaries who perform complex calculations to determine the likelihood that accidents and other mishaps might befall a category of clients.
Insurance underwriters specialize in many different types of insurance including auto, homeowners, marine, commercial, personal/professional liability, and travel.
Education and Training
Insurance underwriters are typically hired with a bachelor's degree. Coursework in business, mathematics, science, accounting, finance, economics, probabilities and statistics, computer technology, and engineering all can be helpful depending on the focus of underwriting activity.
Underwriters need to develop and document analytical, quantitative, decision-making, verbal, writing, and presentation skills in order to be hired and successfully carry out their responsibilities.
Underwriters receive extensive on-the-job training and mentoring if they are hired right out of college. Underwriting trainees typically are paired with seasoned underwriters to learn about underwriting policies, procedures, and techniques.
Many employees encourage or require the acquisition of certifications in underwriting by taking courses through The Institutes. Junior underwriters often earn an Associate in Commercial Underwriting or An Associate in Personal Insurance. The courses and exams related to these certifications generally take about 1-2 years. More seasoned underwriters with at least three years experience often pursue the Chartered Property and Casualty Underwriter.
Pursuing these certifications and the knowledge needed to earn them takes analytical knowledge and experience and applies them directly to the kind of risk management decisions specific to insurance underwriting.
A lot of the decisions underwriters have to make are very straightforward and based on preset standards. For example, when a potential customer applies for something common like auto insurance, relevant details such as the driver's personal information, location of residence, driving record, and more are entered into a computer program that will calculate what that individual's rate should be. It's not that the underwriter doesn't need to use analytical skills for such a case, but auto insurance policies are so common there's an abundance of data from which levels of risk can be assessed.
When insurance policies are for something less common or include variables that are less common or less predictable, underwriters need to rely more on their own experience, knowledge, and insight, and less on a computer algorithm. For example, a client might have an art collection or a lot of jewelry that needs to be insured. An underwriter would then need to assess that individual case more closely and cautiously.
Insurance Underwriter Salaries
According to the Bureau of Labor Statistics (BLS), Insurance Underwriters earned an average of $69.760 in 2017. The bottom 10 percent earned less than $41,800, while the top 10 percent earned at least $123,660. The demand for insurance underwriters is expected to grow at a rate of 15 percent for the decade ending in 2026, according to BLS. This growth rate is significantly higher than the projected rate of growth for all professions combined and is due partly to associated growth in health and medical fields.