Insurance Career Secrets: A blog about the best and fastest ways to become an underwriter
The insurance industry has long been considered a reliable, lucrative career choice. This is true, especially when it comes to the life insurance industry, but to be an insurance underwriter you need to make some major personal and professional changes, or at least be prepared to do so. It may seem complicated and not entirely friendly to newbies, but with the right knowledge and advice, you can enter into this exciting field.
If you are new to all of this, you are probably wondering what exactly is an underwriter? An underwriter is responsible for choosing whether or not to insure a person/policy based on their risks.
If you are thinking about a career in insurance underwriting, you might be wondering if it’s the right profession for you. You may even be telling yourself an insurance underwriter salary isn’t high enough to justify the work that is involved. While there may be some truth to your thinking, the fact of the matter is that an insurance underwriter does have a lot of job security, especially in today’s market.
Becoming an underwriter is a sought after job by many in the insurance industry. They are responsible for analyzing insurance applications and deciding whether or not to accept the risk and insure it. If they decline the risk, their office will correspond with the applicant on how to proceed.
The Underwriting department is the core of any insurance company.
The underwriter is responsible for conducting credit, health and fire inquiries on each client and ensuring the risk written by the insurance company is minimized. It is key that the underwriter perform all thorough inquiries to protect themselves from losses.
As with all careers, there are advantages and disadvantages to becoming an underwriter. For example, they make a higher salary than most other insurance professionals but must work longer work hours. They have to treat every applicant equally whether they are aware of the applicant’s current and previous illnesses or not. Yet, if you are happy with the set-up, you can become an underwriter in as little as one year.
What qualifications do I need to become an underwriter?
While there are no formal education requirements to become an underwriter, most positions are highly specialized and require a bachelor’s degree in a related field. Many employers also prefer candidates who have at least five years of experience in the insurance industry, so it helps if you have completed an internship or apprenticeship before entering the workforce. You may find that some employers prefer candidates who have a master’s degree or postgraduate qualifications in a related field, especially if you are interested in working in a senior role.
Many organizations look for candidates who have technical skills such as strong analytical abilities and exceptional attention to detail. You should be able to demonstrate that you can evaluate complex information with ease, understand risk management strategies and possess strong communication skills. Any relevant work experience will be considered as part of the application process, so it is important that you highlight any relevant positions on your resume.
- Get a bachelor’s degree in finance, accounting or economics. These majors are considered appropriate preparation for a career as an underwriter, according to the BLS. A few schools offer a major in underwriting or insurance management, but these options are not widely available.
- Obtain work experience as a loan officer or financial analyst. This will help you learn how to evaluate risks and make decisions on loans. Some employers prefer applicants with work experience.
- Consider earning professional certification, such as the Certified Insurance Counselor (CIC) designation offered by the National Alliance for Insurance Education & Research or the Chartered Property Casualty Underwriter (CPCU) designation offered by The Institutes.
What are the job responsibilities of an underwriter?
Underwriters are employed by banks, credit unions, mortgage companies and other financial institutions to verify the financial status of loan applicants. The main function of an underwriter is to approve or deny a loan request based on analysis of the applicant’s income, credit history and other factors. Underwriters also perform risk assessments for their employers.
The job is really about risk assessment at the end of the day but to do so there is a lot of paperwork that needs to be analyzed to ensure the financials are in good standing.
Underwriters review a wide range of information provided by individuals who apply for loans, including credit reports, W-2 forms, tax returns and bank statements. An underwriter analyzes this information to determine whether the applicant can afford the requested loan. If an underwriter approves the application, he prepares documentation and forwards it to the relevant department for processing. An underwriter who denies an application must explain his decision in writing to the applicant.
How much money can I really make as an underwriter?
The median annual salary for insurance underwriters is $69,380. The top-paid 10 percent of underwriters earn more than $126,430 while the lowest-paid 10 percent earn less than $42,600. Median pay means half in this profession earn more and half earn less. Salaries vary depending on where you work and how much experience you have.
If you become an independent underwriter, you’ll have even more earning potential because you’ll be able to set your own rates. This means you need to charge more for clients with high-risk profiles and less for those with low-risk profiles.
The financial services industry is thriving as the economy bounces back from the recession. And while Wall Street tends to get a lot of attention, insurance companies and other firms that provide financial services are also on the rise.
Because of this demand, many recent college graduates may want to become an underwriter once they enter the workforce. If you’re thinking about becoming an underwriter, it’s important to understand what the job entails, what skills you need and how much you can make.
What Skills Do I Need To Become An Underwriter?
Like many jobs in finance, being an underwriter requires some specific skills and knowledge. You will need to be proficient in mathematics and statistics, as well as computer programs such as Microsoft Excel and Word. Depending on your position, you may also need experience with specific software used by your employer.
You will also need to understand basic concepts related to finance, including finances related to mortgages.
Underwriters need to be a team player, have an analytical mind and be excellent with numbers. If you have these skills and love to solve problems, then a career as an underwriter may be right for you.
Underwriters are the lifeblood for pricing and rating term insurance risk. The best underwriters have proven instincts and an ability to develop credibility with key managers and carriers. To provide quality business, underwriters must provide insights and recommendations to help managers/agencies price, place and service business. If you think this is the job for you get in touch with a Questpro representative today!