What does an Insurance Underwriter do?

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What is an Insurance Underwriter?

Insurance underwriters decide whether to provide insurance and under what terms. They evaluate insurance applications and determine coverage amounts and premiums.

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What does an Insurance Underwriter do?

Insurance underwriters typically do the following:

  • Analyze information in insurance applications
  • Determine the risk of insuring a client
  • Screen applicants on the basis of set criteria
  • Evaluate recommendations from underwriting software
  • Decide whether to offer insurance
  • Determine appropriate premiums and amounts of coverage
  • Write policies to cover potential loss.

Underwriters are the main link between an insurance company and an insurance agent. Insurance underwriters use computer software programs to determine whether to approve an applicant. They take specific information about a client and enter it into a program. The program then provides recommendations on coverage and premiums.

Underwriters evaluate these recommendations and, using predetermined criteria, decide whether to approve or reject the application. If a decision is difficult, they may consult additional sources such as medical documents and credit scores.

Insurance underwriters must achieve a balance between risky and cautious decisions. If underwriters allow too much risk, the insurance company will pay out too many claims. But if they don't approve enough applications, the company will not make enough money from premiums.

Most insurance underwriters specialize in one of four broad fields: life, health, mortgage, and property and casualty. Although job duties are similar, the criteria used by underwriters vary. For example, for someone seeking life insurance, underwriters consider age and financial history. For someone applying for car insurance (a form of property and casualty insurance), underwriters consider the person's driving record.

Within the broad field of property and casualty, underwriters may specialize even further into commercial (business insurance) or personal insurance. They may also specialize by the type of policy, such as insuring automobiles, boats (marine insurance), or homes (homeowners’ insurance).

How to become an Insurance Underwriter

Employers prefer to hire candidates who have a bachelor’s degree. However, insurance-related work experience and strong computer skills may be enough. Certification is necessary for advancement to senior underwriter and underwriter manager positions. Courses in business, finance, economics, and mathematics are particularly helpful.

Beginning underwriters usually work as trainees under the supervision of senior underwriters. Trainees work on basic applications and learn the most common risk factors. As they gain experience, they become responsible for more complex applications and work independently.

Underwriters must be able to evaluate information and solve complex problems. They must have the ability to consider the costs and benefits of various decisions and to choose the appropriate one. They must pay attention to detail, because each individual item on an insurance application can affect the coverage decision. They need good communication and interpersonal skills because much of their work involves dealing with other people, such as insurance agents. They must be comfortable working with computers and making mathematical calculations.

What is the workplace of an Insurance Underwriter like?

Underwriters usually work indoors in a comfortable office setting. Some property and casualty underwriters may visit properties to assess them in person. Most underwriters work full time.