What is an Insurance Underwriter?

Interested in a challenging, rewarding, and in-demand career in the insurance field? If so, then you may want to pursue a position as an insurance underwriter. According to the United States Bureau of Labor Statistics, there are more than 123,000 underwriting jobs—and the median pay for insurance underwriters exceeds $76,000 per year.

In this article, we'll explain what an insurance underwriter is, their basic job duties, and how you can become one.

What is an Insurance Underwriter?

An insurance underwriter reviews applications from either individuals or businesses to determine the applicant’s eligibility for insurance policies, policy coverage amount, and monthly premiums.

Underwriters play a pivotal role in connecting insurance companies with sales agents, using software, data analytics, and artificial intelligence to assess risk and determine approval for applicants. While they partially rely on automated recommendations, underwriters use their analytical skills to assess the entire situation. When a decision is particularly difficult, they may refer to additional sources such as medical records or credit history for a more informed decision.

Underwriters are most often directly employed by insurance companies. From home and auto insurance to commercial, health, and life insurance policies—underwriters handle it all. While an underwriter will typically specialize in one type of insurance (such as life insurance), it is not uncommon for underwriters to move from one line of insurance to another throughout their careers.

Roles and Responsibilities of Insurance Underwriters

What an insurance underwriter does daily may vary from one insurance company to the next. However, there are general tasks most underwriters carry out, including:

• Reviewing applications for insurance

• Assessing the risk involved in insuring an applicant based on previous claims and other factors

• Screening insurance applicants based on criteria set forth by the insurance company (such as age and driving history for an auto insurance applicant)

• Reaching out to request additional information from applicants as needed

• Creating insurance policies with the necessary premiums, coverage terms, deductibles, and other attributes

• Maintaining records of insured parties, applications, and other documents

Exploring the skills insurance underwriters use daily provides valuable insights for aspiring underwriters to refine and master their craft.

Who Thrives as an Insurance Underwriter?

Given the important decisions underwriters make daily, what skills thrive in this profession?

In addition to formal training, successful insurance underwriters tend to have strong analytical and decision-making skills. With any insurance application, underwriters need to carefully weigh the potential risks and profit, ultimately making the right coverage decision for all involved.

A strong attention to detail is also important for an insurance underwriter when evaluating risk. After all, even the seemingly smallest of details on an insurance application can have a major impact on a person's potential risk profile.

Strong communication and interpersonal skills are also important since the work often requires communicating risk assessments to applicants and insurance agents.

How to Become an Insurance Underwriter

Interested in working as an insurance underwriter? Most insurance companies prefer candidates with a Bachelor's degree, ideally in a related field like economics, risk management, or finance.

While most underwriting jobs don’t require a certification or license, earning an insurance license can offer a fundamental understanding of the industry and policies offered. In fact, most underwriters begin as insurance agents, then move to underwriting.

Some specific certifications to consider include:

• Chartered Life Underwriter certification

• Life Underwriter Training Council Fellow certification

• Chartered Property and Casualty Underwriter certification

If you do get a certification or license, keep in mind that you may need continuing education, or CE credits, to maintain your designation.

The Bottom Line on Insurance Underwriting as a Career

If you enjoy analyzing data and solving problems while making a difference in people's lives, then working as an insurance underwriter may be a great fit for you.

Many underwriters begin in other insurance roles, like personal lines or limited lines, then work their way into major lines of business. Or they may venture into insurance claims adjusting first before finding their way to underwriting. However you decide to enter the insurance industry, the opportunities for finding a fulfilling career in insurance are endless.