Insurance companies offer both individuals and businesses from experiencing a great financial loss from unforeseen circumstances, such as a car accident, illness, and property damage. Insurance underwriters are the ones who make the decision on whether to their company should insure the individual or business and, if they decide to insure, they also decide the terms of the policy.
Insurance Underwriter Job Responsibilities
One of the main responsibilities of an insurance underwriter is determine whether or not an individual or business are a risk for their company to insure them. Using specialized software, the analyze the information provided to them in the applications to verify the probability of a loss for their company. They often use information received from medical specialized, loss-control reports, and reports from actuaries.
If they deem the risk to be too excessive, they will deny the applicant. Otherwise, they will calculate the risk involved and determine the appropriate premium for the applicant, as well as the details of the policy. Again, all of the reports and documents they have received will be reviewed to come up with an acceptable policy for the individual or business.
Insurance Underwriter Training and Education Requirements
To be considered for an entry-level position as an insurance underwriter, the larger companies will require the individual to have a degree in either business or finance. Many find that a bachelor’s degree in just about any field will provide the individual with enough background to qualify for the entry-level position. Anyone who has a goal of becoming an insurance underwriter should consider adding some business law classes, as well as accounting and computer classes to their education resume.
The majority of insurance companies may prefer to hire applicants that have several years of experience in the field of insurance, they do hire those without experience to become trainees or assistant underwriters. Working under the supervision, they will start out with very routine applications. As they continue to grow in their position and gain more knowledge of underwriting, they will move on to more complex applications.
Insurance Underwriter Salary and Wages
According to the Bureau of Labor Statistics, the mean annual salary for underwriters was $63,330 in May of 2009. The highest paid underwriters made up the top ten percent and they earned approximately $99,420 per year. The bottom ten percent made just $35,630 per year. Those who worked with actual insurance carriers earned the most, at a mean wage of approximately $64,440 per year. The actual salary of a position is determined by several factors, including the company, the location, and the experience and education of the individual.
The jobs available for insurance underwriters are expected to continue to grow at the average job rate growth. Because the population of the world is also growing, and more openings will occur from career changes and retirement, it is a solid occupation for anyone who decides to become an insurance underwriter.
Insurance Underwriter Certifications
Due to the complexities and demands on insurance underwriters, continuing education is a necessity. Between the various changes in the tax laws, government programs, and both state and federal regulations, an insurance underwriters may need to take several classes and attend several seminars each year.
The ACU or designation as an Associate in Commercial Underwriting should be the first certification received for those just beginning their career as an underwriter. For those interested in underwriting for personal insurance, the Associate in Personal Insurance or API is the certification needed. Generally, these can take one or two years to complete.
Another certification that can be received in the first initial steps of a career is the Life Underwriter Training Council Fellow or FUTCF from the American College. This is a very basic course that teach the fundamental concepts of insurance.
As a career advances, the next goal is to receive the CPCU designation or the Chartered Property and Casualty Underwriter. This requires the underwriter to pass eight different exams, as well as having three years of experience in the insurance industry.
The next step for someone pursuing an underwriting career should be to receive the Chartered Life Underwriter or CLU designation from the American College. Anyone who receives these designations can then be qualified for senior underwriting positions or managerial positions within an insurance company. However, many of the largest firms will require that anyone in a manager’s position must also have a master’s degree.
Insurance Underwriters Professional Associations
The National Association of Insurance and Financial Advisors or NAIFA is one of the largest and oldest trade associations in the actual insurance field. Members receive many benefits, including training and networking opportunities.
Association for Advanced Life Underwriting, also known as AALU, is an association of approximately 2,000 members who have committed themselves to preserving the insurance industry by involving themselves in government politics. They also provide training opportunities for their members.
