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An insurance underwriter is a financial professional who decides whether to provide insurance to consumers who have applied for insurance policies, and, if approved, the specific terms of these policies (such as coverage amounts and premiums). Read on to learn more about the job roles and responsibilities, salary and career outlook, and educational requirements for insurance underwriters.
Roles and Responsibilities of an Insurance Underwriter
Most insurance underwriters hold full time office jobs for banks, insurance companies, and other financial institutions that provide insurance policies. They are responsible for gathering consumer information that is used to make underwriting decisions, such as personal history, health history, financial information, and other pertinent details depending on the type of policy requested. Using specialized software programs, they input this information to determine the risk of offering insurance to a client, and then make decisions on whether to offer a policy and the terms on the policy based on this evaluation. It’s important for underwriters to strike a balance based on risk; if too many policies are sold with too high of risk, the company will pay out too much money in premiums. If not enough risk is assumed, the company won’t sell enough policies. For this reason, insurance underwriters must possess strong decision making and analytical skills.
Becoming an Insurance Underwriter
In most cases, a bachelor’s degree in finance, economics, business, mathematics, or a related field is necessary to break into this role. However, those with several years of experience in the insurance industry may be able to become an underwriter without a college degree. Most underwriters undergo on the job training. While certification is not required, earning an official designation can make you more attractive to employers. One option is through The American College, an institution that offers continuing education for those in the finance industry. You can also earn a designation from The Institutes, a non-profit dedicated to continuing business education.
Salary and Job Outlook
According to the Bureau of Labor Statistics, insurance underwriters earn an average annual salary of $62,870. However, because many are paid in commission, the highest paid ten percent make over $110,000 per year. Unfortunately, the job outlook for insurance underwriters is poor, largely due to the advent of sophisticated underwriting software that eliminates the need for this role. By the year 2022, the number of jobs in this field is expected to decline by six percent, which is a loss of approximately 6,500 jobs.
Related Resource: Budget Analyst
Despite the projected decline in this field, there is still a need for insurance underwriters; in fact, over 100,000 professionals currently hold this position in the United States. In addition, the skills you learn in this role are highly transferable throughout the financial industry, so it should be feasible for those trained as underwriters to move on to other positions within the field. To learn more about the career of an insurance underwriter, consult the resources of the institutions listed above.
