How to Become an Insurance Underwriter
Among the career paths in insurance, insurance underwriters analyze insurance applications to determine whether they should be accepted or rejected. Insurance underwriters may be employed by insurance companies or by independent insurance brokerage firms. While they normally fill a back-office role in support of insurance sales agents, they sometimes accompany the agents on sales calls to clients or prospective clients.
Available insurance underwriting positions can be found on various job websites such as Glassdoor, Indeed, and CareerBuilder. In addition, insurance companies may post job openings directly on their company website.
To become an insurance underwriter, you must have a bachelor's degree. Any coursework in business, finance or accounting can be helpful, but is not required. A high degree of computer literacy is important, as the position involves performing data analysis, which is commonly computerized. A Master of Business Administration degree can be a useful credential, depending on the firm.
Entry-level jobs usually require no special training or certification. However, obtaining some formal certification often is important to advance in the field. The Insurance Institute of America (IIA) and the American Institute for Chartered Property Casualty Underwriters (AICPCU) are the leaders in insurance underwriting training and certification.
The most respected credential that they offer is Chartered Property and Casualty Underwriter (CPCU). It requires passing eight out of 11 courses and having at least three years of relevant insurance industry experience. The CPCU is awarded either in commercial or in personal insurance.
Depending on the type of insurance being requested, insurance underwriters may conduct independent investigations of applicants, such as credit or background checks. Also, if property insurance is sought, insurance underwriters may need to enlist the help of professional appraisers.
Actuaries assess risk at a macro level, determining the proper premiums and policy terms for broad categories of individuals and properties. Insurance underwriters work at a micro level, analyzing specific applications for insurance, and setting the specific policy terms and conditions for each that they accept, within guidelines set by the insurance carriers. Among these terms and conditions is the premium to be paid by the insured.
The majority of insurance underwriters work close to a standard 40-hour week, normally from fixed office locations. However, some insurance underwriting jobs require varying degrees of travel, such as those related to the insuring of workplaces, construction sites, and ships. In these cases, the insurance underwriter usually must inspect the venue to assess the risk.
Advantages and Disadvantages
Insurance underwriting will appeal to analytical people. It also can lead to opportunities in general management within the insurance industry. However, in some specialties, such as writing various lines of personal insurance, where you process data in a fixed office location, the job can become mechanical and repetitive.
The median annual compensation for an insurance underwriter is $54,803 according to January 2019 data, with the top 10 percent earning $85,000.