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If you’re interested in finance and wish to enter the insurance or banking industry, it’s likely that you’ve considered becoming an underwriter.
Underwriters are trained professionals who use computer analysis software to determine whether applicants should be approved for insurance, loans, mortgages, or other financial products. Underwriters play an important role in keeping their employing organizations profitable by creating a suitable balance between risk and caution.
In today’s digital world, automated software has streamlined the application process and made employment of underwriters drop six percent over the decade. Yet, there’s still a need for qualified underwriters to evaluate the automated recommendations from a human perspective. The following is a brief job overview to help you determine whether becoming an underwriter is right for your financial career.
What Underwriters Do
Underwriters are given the primary responsibility of assessing applications from potential clients to determine whether their financial coverage should be accepted or rejected. They focus in on the three C’s of underwriting, which are credit reputation, capacity, and collateral, to figure out if applicants are too risky. On a typical day, underwriters will be involved in perusing applications, screening applicants based on specific criteria, evaluating software recommendations, researching further background information, contacting field representatives, and selecting appropriate premiums. Underwriters may work closely with actuaries and claims managers to make certain the agency can retain a good client base with minimal risk for losses.
Where Underwriters Work
According to the BLS, there’s around 106,300 underwriters currently working around the United States to give their expert advice on accepting loan or insurance requests. More than 72 percent of underwriters are employed by insurance carriers to evaluate applications for life, health, property, and casualty coverage. Many underwriters also work for banks, private mortgage lenders, securities or commodities brokerages, credit intermediation firms, employee benefits funds, and government agencies. It’s possible for underwriters to work for private corporations to help managers reduce risk of business ventures too. Underwriters usually work full-time to obtain an average annual salary of $70,570, or a mean hourly wage of $33.93.
How to Become an Underwriter
Leaping into a career in underwriting typically will require candidates hold a four-year bachelor’s degree from an accredited higher learning institution. In some cases, an associate’s degree will be accepted with a decent amount of industry-related underwriting experience. Most aspiring underwriters choose to earn an undergraduate major in finance, business administration, economics, mathematics, statistics, or accounting. Taking elective courses specifically in risk management and underwriting will be valuable. From there, entry-level underwriters will receive on-the-job training with senior professionals to learn basic application procedures. For faster advancement, underwriters with three years of experience can obtain certification from The Institutes by passing a series of examinations.
Not only do underwriters use their mathematical abilities to analyze risk and quantify an applicant’s premium cost, they also utilize their people skills to attract new business. Working in underwriting is rewarding because it allows professionals to directly impact their organization’s bottom line by maximizing profit potential. After becoming an underwriter, there’s also great opportunity for upward mobility for gaining more independence, leadership responsibility, and income. Competition may be strong, but those determined to work as underwriters can challenge themselves in determining the level of risk potential clients pose.
