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Is Insurance Underwriting Right For You?

If you've ever filled out an application for any sort of insurance, you've faced questions

that theinsurancecompany uses to determine the level of risk you pose, your

premiumsand the extent of coverage for which you are eligible. The person who

reviews and evaluates your responses is an insurance underwriter. This job requires a

thorough, decisive person with excellent analytical skills. If you have a background in

finance and an eye for detail, you may want to consider insurance underwriting as a

career. Read on as we explore this challenging profession in detail.

A Day In The Life

To "underwrite" means to accept liability for possible losses by clients. As such,

underwriters review new or renew applications for insurance coverage, both for

individuals and companies. With the help of computer programs, underwriters

determine the risk involved in insuring a particular person or company and calculate the

appropriate premiums for the amount of coverage requested. These are important

decisions, as insurance companies assume billions of dollars of risk each year - if an

underwriter is too conservative, an insurance company may lose business. If he or she

is too generous, the company may have to pay excessiveclaims.

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Underwriters work for insurance companies and are typically located at the company's

headquarters or a regional branch office. Underwriting is typically a desk job with a

standard 40-hour work week, although overtime may be required as determined by

each underwriting project. Evening and weekend hours are not uncommon.

Working with computers and technology is a vital part of underwriting. Computer

software systems are used to analyze and rate insurance applications, make

recommendations based on risk and adjust premium rates according to this risk. (For

related reading, seeInsight Into Insurance Scoring.)

Underwriting Opportunities

There are many lines of insurance for underwriters to work in, but the four main

categories are:

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1. Life insurance2. Health insurance3. Mortgage insurance4. Property/casualty insurance

Working as an underwriter differs depending on the type of insurance because of the

types of clients the underwriter will work with and the risks that are assessed. To learn

more about health insurance underwriting see the National Association of Health

Underwriters and for information on property/casualty insurance check out Insurance

Information Institute.

The Tools Of The Trade

Most employers prefer candidates with a college degree or professional designation and

some insurance-related experience. A bachelor's degree in almost any field may be

sufficient to qualify a person to begin a career as an underwriter, but employers will

probably prefer applicants with completed coursework in business, law and accounting

or work experience in the insurance and underwriting field.

The most important underwriting skills are learned on the job. As such, many

underwriters begin their careers as trainees or assistant underwriters. During this time,

they help collect and evaluate information on clients, but are supervised by an

experienced underwriter in the firm. Some large insurance companies offer

comprehensive training programs for trainees. These typically include study and the

gradual assignment of more complex tasks.

Strong computer skills are essential to a career in underwriting. As such, on-the-job

computer training tends to continue through an underwriter's career as the programs

that these professionals use are updated.

Certifications

As with other careers, certifications can improve earning power for insurance

underwriters and open up new opportunities for advancement. Underwriters with

experience and additional designations may advance to senior underwriter and

managerial positions, although some employers require a master's degree to achieve

this level. (For related reading, seeThe Alphabet Soup Of Financial Certifications.)

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Field Certification Abbrv. Organization

Life insurance Chartered Life Underwriter CLUThe American College

Health insurance Registered Health Underwriter RHU

Personalinsurance

Associate in Personal Insurance APIInsurance Institute of

AmericaBusiness policies

Associate in Commercial

UnderwritingACU

Property/casualtyChartered Property andCasualty Insurance Underwriter

CDCUAmerican Institute forChartered PropertyCasualty Underwriters

The ACU and API designations both typically take at least a year to complete, while the

CPCU designation requires three years of insurance experience and candidates must

pass eight exams. (For more on the CLU certification, seeCFP, CLU Or ChFC - Which Is

Best?)

Show Me The Money

Statistics collected by the Bureau of Labor Statistics in 2006 show that the average

annual earnings for insurance underwriters is $57,960. (Check out the Bureau of Labor

Statisticss mostup-to-date wage statistics for insurance underwriters.)

Insurance companies may also provide above-average benefits such as retirement

plans and, of course, excellent group life and health insurance. Salary incentives and

coverage of the costs of tuition for courses that trainees complete may also be offered.

Conclusion

Finding where you fit in the working world can involve considering a number of

variables, but if you're a detail-oriented, analytical person who likes to put the pieces

together to solve a problem, insurance underwriting may be a career for you

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