How to Become an Insurance Underwriter

Insurance Underwriters are professionals who are experienced in deciding whether an individual is insurable.

Some common types of insurance applications include: auto, home, rental and life insurance.

Insurance Underwriters make the decision to insure individuals by reading and evaluating applications and analyzing them to determine a client’s risk.

Individuals who want to become an Insurance Underwriter will have strong analytical skills that can help them determine whether someone should be insured and if so, determine the coverage amounts and premiums.

Education Requirements to Become an Insurance Underwriter

Individuals who want to become an Insurance Underwriter can enter this profession by completing an undergraduate degree.

A postsecondary degree can be substituted by work experience in the insurance industry.

Certification is also recommended for individuals who would like advancement opportunities.

There is no specific degree an individual needs to attain in order to become an Insurance Underwriter.

However, there are some helpful courses that will help an individual enter this profession.

Some recommended courses or degrees to pursue include: mathematics, economics, finance or business.

Individuals can also become an Insurance Underwriter by gaining on the job work experience.

Individuals pursuing this career this way will need strong basic computer skills and work in an entry level position to learn about the insurance industry.

An Insurance Underwriter at the entry level will typically learn the basics to underwriting under the supervision of an experienced or senior underwriter.

Under this supervision, individuals will work on basic underwriting applications and will typically learn the most common risks and how to evaluate them.

During this training, they will gain experience and move on to more complicated applications as well as begin to work independently.

Insurance Underwriter Job Description

Insurance Underwriters work for insurance companies and agents to determine whether an individual should be covered by insurance.

Some common types of insurances may include: life, home, auto and rental insurance.

Insurance Underwriters begin determining a client’s risk by beginning with the insurance application.

They will read and thoroughly analyze the information presented in the application as well as gather additional information to make their decision.

These professionals may be aided by underwriting software that does most of the analysis and makes recommendations.

Insurance Underwriters will still use the information gleaned from the underwriting software to approve or deny coverage.

In addition to analyzing information reported on an application, Insurance Underwriters are also responsible for the following tasks:

  • Screening applications based on established criteria
  • Gather information provided by underwriting software
  • Obtain additional information from professionals such as: medical personnel
  • Determine whether individuals are insurable
  • Decide suitable premiums or amounts of coverage individuals qualify for

Insurance Underwriters are the intermediate professionals between an insurance agent and an insurance company.

Their main responsibility is to accept or deny coverage for a variety insurance coverage.

These individuals typically work for the three main types of insurance: property and casualty, property, life and health insurances.

These individuals are responsible for creating a balance in the applications they accept and deny.

Accepting too many applications can result in an insurance company losing money by paying out too many claims while accepting too little applications will reduce profits in a lack of premiums.

Insurance Underwriter Salary and Career Path

In 2012, the median salary for Insurance Underwriters was approximately $62,870 per year.

Exact wages will depend on a variety of factors including years of experience and the type of company an individual works for.

For example, individuals working for insurance carriers can expect to earn a median income of approximately $63,820 while those who work for insurance broker or agencies can expect a median salary of approximately $59,340 per year.

The job outlook for Insurance Underwriters is expected to decline by 6 percent through the year 2022.

This outlook is attributed to the underwriting software being developed that automates the underwriting process.

However, job prospects will be aided by the need for Insurance Underwriters to assess automated underwriting recommendations.

The job outlook will also be aided by the amount of retirees in this profession that need to be replaced by younger professionals entering the field.

Individuals interested in a career as an Insurance Underwriter will use their analytical skills to determine whether individuals are insurable.

Individuals in this profession also have the option to pursue advanced opportunities such as senior underwriter or underwriter management positions by seeking additional certification.

Pursuing this career track can give individuals a variety of opportunities for advancement.

Frequently Asked Questions

What does an insurance underwriter do?

The main responsibility of an insurance underwriter is to decide whether or not an applicant should be granted insurance coverage.

Typically, insurance agents forward the applications to the underwriter; then, the specialist reviews and analyzes the information, puts the data in an underwriting software program and finally decides whether the application should be denied or approved.

Sometimes an insurance underwriter would also look at the medical history of the applicant, for example, and then recommend how much the premiums should be.

An underwriter that works with property insurance might have to travel to the property to make an informed decision.

Specialists also spend a lot of their time reviewing the portfolios of the existing clients to then advise whether or not the agents should continue to provide coverage.

How much do insurance underwriters make?

On average, an insurance underwriter can make a little more than $55.500 per year in the United States.

In case you decide to choose this career path, you can expect to earn anywhere between $40.000 and $85.000 annually.

The salary would certainly depend on a variety of factors – your education and experience level, the employer, the location, and so on.

The professionals that work in New York, California, and Illinois, for example, have the highest average salaries.

An entry-level insurance underwriter can earn around $46.500 per year, while a top-level specialist with plenty of experience can make $60.000 and more per year.

How much does it cost to become an insurance underwriter?

In most cases, you would need a bachelor’s degree in business, economics, mathematics or a related field, in order to become an insurance underwriter.

A year in a university can cost you anywhere between $8.000 and $45.000 (and more); the cost depends on a variety of factors (bear in mind that the books, supplies, and accommodation expenses are not included).

You can also become a certified associate in personal insurance or associate in commercial underwriting; the course materials will cost you over $200 and the exam fee is over $185.

What is the demand for insurance underwriters?

Between 2018 and 2028, the insurance underwriter job market is expected to shrink by 5%, according to the Bureau of Labor Statistics.

Automated underwriter software helps process applications much faster and doesn’t require a specialist to be present during the process.

Thus, the job market is going to provide low employment opportunities in the near future.

How long does it take to become an insurance underwriter?

It will take you 4 years to obtain a bachelor’s degree.

You can consider seeking an internship during your last year in university to get that on-job experience as the majority of employers prefer the candidates to have at least a few years of experience.

The certification programs usually require 2 years of coursework and exams to complete.

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