Underwriter

The term underwriter usually refers to an insurance underwriter, a financial professional who evaluates the potential risk of loss involved in insuring an individual or a business. The underwriter identifies and calculates the risk, establishes appropriate premium rates and writes policies that cover it.

Becoming an insurance underwriter means working with a substantial degree of risk because an insurance company can lose business if it appraises risks too conservatively or too liberally. The underwriter evaluates and develops a coverage plan that attempts to ensure neither the insurance company nor the individual are at loss.

Underwriter Degrees

Most insurance companies prefer underwriters to possess a minimum of a bachelor’s degree in business administration, finance, business law or accounting, but a master’s degree in any of these areas is often preferred.

A first step in an underwriter’s education is to visit the Insurance Institute of America (IIA), which offers courses, exams and designations. The Chartered Property and Casualty Underwriter (CPCU) designation offered by The American Institute for Chartered Property Casualty Underwriters (AICPCU) is the final stage of development for an underwriter. To qualify, an individual must pass 10 exams and have acquired a minimum of three years of experience in the insurance industry.

Underwriter Job Description

A career in underwriting is a good match for individuals who enjoy analyzing information and concentrating on details. Daily job duties of an insurance underwriter include the following:

  • Exam documents to determine the degree of risk
  • Decline insurance in case of excessive risk
  • Contact field representatives, medical personnel and others to obtain further information relevant to the determination of risk
  • Explain company underwriting policies to applicants
  • Authorize reinsurance of a policy when the risk is too high

To succeed as an insurance underwriter, one must have sound judgment, excellent communication and good social skills, as an underwriter often communicates with agents and other insurance professionals. Technology skills are also essential, as computers constitute an integral part of most underwriters’ jobs.

Underwriter Salary

According to the U.S. Department of Labor, employment prospects for underwriters are expected to be about average during the next decade in comparison with other occupations. Opportunities are expected to be better for those with a background in finance and strong computer and communication skills.

Figures released by the U.S. Bureau of Labor Statistics indicate that the average annual salary of insurance underwriters is around $55,000, with a range running from a low of less than $34,000 to a high of more than $90,000.



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