Any insurance company is aware of the high threat of liability and risks that entail any company in this field. Since the work of an insurance company is an avenue full of risk and liability, these companies need to keep their funds in check and attempt to repay claims; this is where the role of an insurance underwriter comes into prominence.
Insurance is a much-chagrined field of work, often due to an element of financial and other risks usually associated with it. As an insurance underwriter, it will be your job to evaluate risks associated with any claim or insurance. Let us now look at what the job would entail:
What is an Insurance Underwriter?
Insurance underwriting involves evaluating the overall risks of ensuring various entities like people, property or organizations. The role also differs from firm to firm as most insurance agencies focus on different areas of expertise.
There are different types of insurance underwriters catering to a specific insurance niche, such as:
- A commercial insurance underwriter who looks at non-residential real estate.
- A life insurance writer, who evaluates age, medical conditions etc., for a medical policy.
- Health insurance underwriters determine health care policies.
- Business insurance writers evaluate risks in insuring businesses of any size.
The primary task of an insurance underwriter is to determine when to or under what conditions should insurance be provided to potential clients, including individuals, businesses or others. Underwriters usually work for agencies, brokers and insurance carriers. They evaluate applications and are responsible for fixing the premiums for these policies. These calculations are crucial as these companies assume millions worth of risk each year, and if an underwriter is too conservative, the company could lose its business altogether.
The major functions that characterize a career in insurance underwriting are:
- Carefully analyze the information stated on insurance applications.
- Assessing the total risk involved in insuring a client.
- Screening any and all applicants based on criteria already established by the company.
- Evaluating and determining potential recommendations and risks from the underwriting software.
- On field research involving contacting and establishing relations to medical professionals and other field representatives,
- Handling the primary decision on whether or not to provide insurance.
- Based on the available information, determining insurance premiums and the appropriate amount of coverage to be given.
- Constantly reviewing and updating key terms that govern the underwriting software. Optimizing the software to accommodate new rules and regulations.
How do you become an Insurance Underwriter?
In terms of qualifications required, companies mainly look for graduates or other professional designations but preferably with experience in an insurance-related field. Although any degree may suffice, we see employers prefer applicants from business, law, or an accounting background due to the nature of the work.
There are Masters Degrees offered in insurance risk management in some colleges. This is yet another extra qualification that will be beneficial to find a career in this field. But the important stuff is learnt in the area as experience as an assistant underwriter, as you will learn the essential tools of the trade from experienced underwriters.
As is the case in most professions, there are certificate courses you can take up as an underwriter to improve your proficiency and subsequently your position once you find a job. Bypassing some certifications, you can demand a higher salary, open up new opportunities and go up in rank to even senior underwriters.
Some of these certifications you can look into are:
Chartered Life Underwriter (CLU) – This is offered by The American College and is a certification in life insurance underwriting.
Associate in Personal Insurance (API) – Offered by the Insurance Institute of America, this course is for personal insurance.
Registered Health Underwriter (RHU) – A health insurance certification from the American College.
Chartered Property/Casualty Underwriter (CPCU) – This certification falls under the category of Property/Casualty, and it is offered by the American Institute for Chartered Property/ Casualty writers.
Associate in Commercial Underwriting (AU) – For business policies, The Insurance Institute of America provides this certification course.
In conclusion, it must be a priority in the modern world to find out where you see yourself in a few years. A career as an insurance underwriter may be for you if evaluating risks, being analytical and solving problems is your forte.