How to Become an Insurance Underwriter | Maryville Online

If you have excellent math skills and enjoy analyzing data, you may want to consider a career as an insurance underwriter. These professionals assess various types of risks to help their companies determine if they should insure someone and, if so, how much the policy should cost. their overall goal is to set rates that are accurate and competitive while generating profit for their businesses. Analytical skills, good judgment, and meticulous attention to detail are essential in this role, given the complexity and importance of underwriting work.

If this career sounds like a good fit for you, read on for more details on what insurance underwriters do, how to become one, and other helpful information.

Reading: How do you become an insurance underwriter

An insurance underwriter reviews documents while talking on her cell phone.

what does an insurance underwriter do?

Insurance underwriters specialize in evaluating the key risk factors associated with underwriting health, life, homeowners, and commercial liability policies. They collect and analyze data to predict the likelihood and amount of claim payments over the life of a given policy, and report on the potential financial implications for their businesses. Insurer ratings play a vital role in determining the rates that insurers offer their clients.

The underwriting process begins when a potential customer (an individual or business) submits an application through an insurance agent. the underwriter reviews all relevant information and calculates the profitability of insuring each asset and individual. After evaluating the risks and estimating the impact of the policy on the company’s profits, the underwriter quotes a price for the insurance premium or recommends that the company deny the application.

Much of what insurance underwriters do is now automated. underwriters use software applications to develop quotes, assess risk, and determine premium costs, among other tasks.

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steps to become an insurance underwriter

There are different paths you can take to become an insurance underwriter. If you have insurance-related work experience and strong computer skills, you may qualify for some positions in the insurance industry. many companies require a bachelor’s degree and related certifications. however, depending on the insurance company, you may be hired as an entry-level underwriter. If you have a bachelor’s degree and certification, you’ll be in an advantageous position to qualify and advance to senior underwriter and underwriter manager positions.

step 1: get a bachelor’s degree

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Most insurance companies require insurance underwriters to have a bachelor’s degree, preferably in a business-related field, such as an online bachelor’s degree in finance. Such programs provide graduates with a fundamental understanding of basic business concepts, including financial services, business management, valuation, financial modeling, and financial resource allocation.

In addition to these fundamentals, students will also become familiar with the principles of leadership, communication, and ethical decision-making. This preparation can help graduates enter the insurance industry as highly-skilled financial professionals who are confident, persuasive, and able to understand complex concepts.

Step 2: Get experience on the job

Gaining relevant work experience is an important step in becoming an insurance underwriter. While recent graduates can sometimes start work in entry-level positions in the insurance industry, it’s common for employers to look for candidates who have multiple years of experience.

Starting in an entry-level position, such as an insurance policy processing clerk or procurement clerk, can provide opportunities for recent college graduates to learn about the insurance industry and gain skills in using applications financial and insurance. In addition, they can develop financial skills along with analytical and reasoning skills to understand the complexities of insurance underwriting.

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Step 3: Meet Licensing and Certification Requirements

Many insurance companies require underwriters, especially those seeking managerial and high-level positions, to obtain professional certifications. subscribers must complete the relevant courses and pass the exams to qualify for the certifications and keep them current. the purpose of these courses is to help subscribers stay current on new insurance topics, emerging technologies, and regulatory updates.

Subscribers can search for a variety of certification options. An insurance industry organization called The Institutes offers a training program for new underwriters, as well as several programs for professionals with varying levels of experience and specialized areas of expertise. For example, underwriters who have two or more years of experience can complete a program to be designated as a licensed property and casualty underwriter (CPCU).

The Institutes also offer certifications as Associate in Business Underwriting (AU) and Associate in Personal Insurance (API). courses for these credentials typically take one to two years to complete.

Another industry organization, the National Association of Insurance and Financial Advisors, administers the Life Underwriters Training Council (LUCF) member designation. Underwriters with at least three years of relevant experience may seek the Chartered Life Underwriter (CLU) designation through the American College of Financial Services.

salaries of insurance underwriters

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The median annual wage for an insurance underwriter was $69,380 in 2018, according to the US government. uu. bureau of labor statistics. the top 10 percent of earners earned more than $122,840, while the bottom 10 percent earned less than $42,260. salaries can vary widely depending on factors including education, certifications, additional skills, and experience.

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job prospects for insurance underwriters

The BLS indicates that while automation could limit hiring in some underwriting areas, several subfields in the insurance industry are likely to see significant growth in job opportunities for underwriters. For example, employment of insurance underwriters in the medical insurance and health care industry is projected to increase by 15 percent between 2016 and 2026, according to the BLS. Furthermore, complex insurance fields like workers’ compensation or marine insurance require a level of human analytical knowledge that automated software cannot replicate.

More information on how to become an insurance underwriter

The path to becoming an insurance underwriter can be rewarding and intellectually challenging. As an expert in risk assessment and data analysis, you can play a critical role in helping individuals and businesses obtain the insurance coverage they need. Maryville University’s online finance degree provides students with the financial knowledge and business skills that can prepare them to thrive in a career as an insurance underwriter.


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