How Do I Become an Underwriter?

If you enjoy working with computers and mathematics and are comfortable analyzing information to make decisions, then you might be wondering how to become an underwriter. Insurance underwriters analyze the amount of risk involved in providing insurance coverage and decide how much coverage a client is eligible for and what premiums that client will pay. An insurance underwriter is an important part of the system for mortgages, life insurance, health insurance and property insurance. An underwriter writes the insurance policy, stating the amounts of coverage, the premiums, any exclusions that apply and any other information that the insurance carrier would need to have included in a written agreement.

In determining whether or not to insure a client, underwriters might consider information such as credit scores or medical records. An insurance underwriter may also study a client’s driving record when deciding whether to provide automobile coverage or review information such as age and financial records in determining a client’s eligibility for life insurance.

Underwriters use computer software to help them decide how high a risk the insurance company carries in agreeing to cover a client. An underwriter will review insurance applications and enter the information into the computer program to learn what quantities of coverage may be offered to the client and what amount of money the client must pay as a premium in order to obtain that coverage. Based on the computer software’s recommendations, the underwriter will choose whether or not to insure the client based on perceived risk. This concept of risk is important in the field of insurance underwriting. It is an underwriter’s responsibility to only approve the applications of clients who do not carry a high risk of needing to collect payments, but it is also the underwriter’s responsibility to make sure that the company covers enough clients to make money rather than losing it.

To become an underwriter, candidates should first earn a bachelor’s degree in business, mathematics or a related field that will provide the aspiring insurance underwriter with the business, economics, finance and mathematics background necessary to succeed. Excellent computer skills may also increase a candidate’s job prospects. To further ensure a better job outlook, aspiring underwriters should work to attain certification from a well-respected organization such as the Insurance Institute of America, The American College and American Institute for Chartered Property Casualty Underwriters.

Insurance underwriters enjoy a higher than average median annual salary. As of May 2010, underwriters earned a median salary of $59,290 per year, as compared to the $33,840 median annual salary for all occupations, according to the United States Department of Labor Bureau of Labor Statistics. Most underwriters work with insurance carriers, though others work elsewhere in the insurance, financial and business fields. Are you detail-oriented and fond of evaluating data to make decisions? Do you possess strong skills in mathematics and proficiency in using computers? If so, knowing how to become an underwriter might be the first step toward your satisfying new career.

Featured Degree Programs