Insurance Underwriter
An insurance underwriter is a professional who evaluates and assesses the risk of insuring individuals or groups by processing and reviewing insurance applications. These experts utilize risk assessment software and actuarial data to determine acceptable risk levels, which informs their decisions to approve or reject insurance policies. The role typically requires strong analytical skills, attention to detail, and a background in statistics and risk assessment.
While the insurance industry overall is expected to grow, the specific occupation of insurance underwriter is projected to decline due to the increasing automation of risk assessment tasks. Despite this, the field experiences considerable turnover, suggesting ongoing opportunities for new entrants. Insurance underwriters commonly work in office settings but may also travel to interview applicants or inspect properties related to insurance applications. Generally, a bachelor’s degree in business, finance, or a related field is required, along with moderate on-the-job training. The median annual salary for insurance underwriters is approximately $77,860.
Insurance Underwriter
Snapshot
Career Cluster(s): Finance
Interests: Statistics, risk assessment, working with details, helping others
Earnings (Yearly Median): $77,860 per year, $37.44 per hour
Employment & Outlook: -2 percent (Decline)
Entry-Level Education Bachelor's degree; certification
Related Work Experience None
On-the-job-Training Moderate-term on-the-job training
Overview
Sphere of Work. Insurance underwriters, also referred to as account underwriters, property underwriters, commercial underwriters, and health underwriters, are responsible for processing, reviewing, and approving or rejecting insurance applications. They use risk assessment software and actuarial data to evaluate insurance applications for individual and group insurance policies. Insurance underwriters are risk assessment experts who use company or business risk guidelines to determine whether or not selling insurance to an individual or group falls within acceptable risk parameters.
Work Environment. Although the insurance profession as a whole is expected to experience long-term economic growth, the insurance underwriting occupation is in transition due to the increasing use of computer software that can analyze data and assess risk in significantly less time than it would take an underwriter. Consequently, employment opportunities for underwriters are expected to decline rather than grow; however, the profession experiences a significant rate of employee turnover, so new applicants are usually welcome.
Insurance underwriters may travel for work. For instance, health insurance underwriters may travel to businesses to interview applicants or union representatives for group health insurance policies, and construction underwriters may travel to job sites to inspect the progress and risk of building projects. Insurance underwriters generally work forty-hour weeks but may be required to work overtime during periods of increased business.
Occupation Interest. Individuals attracted to the insurance underwriting profession tend to be organized, analytical, and detail-oriented people. Those individuals who excel as insurance underwriters exhibit traits such as responsibility, good time management, and a desire to help. Insurance underwriters should enjoy insurance work and have a background in statistics and risk assessment.
A Day in the Life—Duties and Responsibilities. The daily duties and responsibilities of insurance underwriters will vary with job specialty and employer. Areas of insurance underwriting specialization include health insurance, life insurance, homeowners insurance, mortgage insurance, liability insurance, property insurance, automobile insurance, construction or building insurance, and commercial or business insurance.
Insurance underwriters interview insurance applicants to gather information about applicants’ health, lifestyle, family history, employment history, home value, geographical location, and natural disaster risks. They may assist insurance applicants with insurance forms or request additional information from applicants to make final coverage and premium decisions. Processing individual and group insurance applications may involve using computer software and actuarial tables (which calculate life expectancy) to analyze risk, confirming the value of property listed in insurance applications, reviewing individual and group insurance policies to assess what type and amount of coverage to offer applicants, and determining premium amounts and levels. Other duties include working with actuaries to develop acceptable risk guidelines for businesses, visiting construction sites to assess progress and on-site risks for workers and the community, and traveling to businesses to interview union representatives for group health insurance policies.
If the underwriter’s data indicates that the monies obtained from monthly premium payments are likely to exceed the costs of insuring the client, they write up a policy that covers the risks in question, and the client is notified. In some cases, an underwriter may have to notify insurance applicants that the company has chosen not to approve their application.
Insurance underwriters may also need to participate in industry seminars and conferences to satisfy continuing education requirements for certification. They should also stay up to date with regulatory and ethical issues in the insurance industry by reading insurance industry journals and participating in insurance industry associations. They usually report to a chief underwriter, supervising underwriter, or managing underwriter.
According to the US Bureau of Labor Statistics (BLS), more than 125,000 people were employed as insurance underwriters in 2022. That figure was projected to decline by 3,000 from 2022 to 2032.
Multiple Line Underwriters. Multiple line underwriters specialize in a combination of risks.
Commercial Account Underwriters. Commercial account underwriters handle business insurance only.
Automotive Underwriters. Automotive underwriters specialize in insuring motor vehicles.
Compensation Underwriters. Compensation underwriters specialize in insuring employees against injury and illness.
Pension and Advanced Underwriting Specialists. Pension and advanced underwriting specialists insure employees with retirement plans.
Special Risks Underwriters. Special risks underwriters insure the unusual, such as art objects and celebrities.
Marine Underwriters. Marine underwriters insure boats and nautical activities.
Fire Underwriters. Fire underwriters insure property against fire.
Work Environment
Immediate Physical Environment. Insurance underwriters generally work in comfortable office environments. In some cases, insurance underwriters will be required to travel to the field to interview insurance applicants and inspect insured properties and construction sites.
Human Environment. Insurance underwriters interact with insurance applicants, insurance policyholders, actuaries, insurance sales agents, insurance adjusters, lawyers, coworkers, and supervisors.
Technological Environment. Insurance underwriters use computers, actuarial tables, insurance rate and code books, smartphones, cameras, calculators, Internet communication tools, automated underwriting systems, and spreadsheets to complete their work.
Education, Training, and Advancement
High School/Secondary. High school students interested in pursuing a career as an insurance underwriter should prepare by building good study habits. High school–level study of sociology, bookkeeping, and mathematics will provide a strong foundation for work as an insurance underwriter or for college-level study in the field. Part-time or internship opportunities can provide valuable experience.
Postsecondary. Postsecondary students interested in becoming insurance underwriters should obtain a bachelor’s degree in business administration, law, economics, actuarial science, finance, statistics, or accounting. Coursework in computer science, political science, and ethics may also prove useful in their future work. Postsecondary students can gain work experience and potential advantage in their future job searches by securing internships or part-time employment with local insurance businesses.
Related Occupations
− Actuary
− Auditor
− Insurance Claims Adjuster and Examiner
Bibliography
"Insurance Underwriters." O*NET OnLine, 6 Aug. 2024, www.onetonline.org/link/summary/13-2053.00. Accessed 23 Aug. 2024.
"Insurance Underwriters." US Bureau of Labor Statistics, 17 Apr. 2024, www.bls.gov/ooh/business-and-financial/insurance-underwriters.htm. Accessed 23 Aug. 2024.