Insurance Underwriters

Summary

insurance underwriters image
Insurance underwriters determine the risk of insuring a client.
Quick Facts: Insurance Underwriters
2014 Median Pay $64,220 per year
$30.88 per hour
Typical Entry-Level Education Bachelor's degree
Work Experience in a Related Occupation None
On-the-job Training Moderate-term on-the-job training
Number of Jobs, 2014 103,400
Job Outlook, 2014-24 -11% (Decline)
Employment Change, 2014-24 -11,700

What Insurance Underwriters Do

Insurance underwriters decide whether to provide insurance and under what terms. They evaluate insurance applications and determine coverage amounts and premiums.

Work Environment

Insurance underwriters work indoors in offices. Most work full time.

How to Become an Insurance Underwriter

Employers prefer to hire candidates who have a bachelor’s degree. However, insurance-related work experience and strong computer skills may be enough. Certification is generally necessary for advancement to senior underwriter and underwriter manager positions.

Pay

The median annual wage for insurance underwriters was $64,220 in May 2014.

Job Outlook

Employment of insurance underwriters is projected to decline 11 percent from 2014 to 2024. Automated underwriting software allows workers to process applications more quickly than before, reducing the need for underwriters.

State & Area Data

Explore resources for employment and wages by state and area for insurance underwriters.

Similar Occupations

Compare the job duties, education, job growth, and pay of insurance underwriters with similar occupations.

More Information, Including Links to O*NET

Learn more about insurance underwriters by visiting additional resources, including O*NET, a source on key characteristics of workers and occupations.

What Insurance Underwriters Do

Insurance underwriters
Insurance underwriters use computer software programs to determine whether an applicant should be approved.

Insurance underwriters decide whether to provide insurance and under what terms. They evaluate insurance applications and determine coverage amounts and premiums.

Duties

Insurance underwriters typically do the following:

  • Analyze information stated on insurance applications
  • Determine the risk involved in insuring a client
  • Screen applicants on the basis of set criteria
  • Evaluate recommendations from underwriting software
  • Contact field representatives, medical personnel, and others to obtain further information
  • Decide whether to offer insurance
  • Determine appropriate premiums and amounts of coverage

Underwriters are the main link between an insurance company and an insurance agent. Insurance underwriters use computer software programs to determine whether to approve an applicant. They take specific information about a client and enter it into a program. The program then provides recommendations on coverage and premiums. Underwriters evaluate these recommendations and decide whether to approve or reject the application. If a decision is difficult, they may consult additional sources, such as medical documents and credit scores.

Underwriters analyze the risk factors appearing on an application. For instance, if an applicant reports a previous bankruptcy, the underwriter must determine whether that information is relevant to the current policy. The underwriter would consider how far in the past the bankruptcy occurred and how the applicant’s financial situation has changed since the applicant filed for bankruptcy.

Insurance underwriters must achieve a balance between risky and cautious decisions. If underwriters allow too much risk, the insurance company will pay out too many claims. But if they don't approve enough applications, the company will not make enough money from premiums.

Most insurance underwriters specialize in one of three broad fields: life, health, and property and casualty. Although the job duties in each field are similar, the criteria that underwriters use vary. For example, for someone seeking life insurance, underwriters consider age and financial history. For someone applying for car insurance (a form of property and casualty insurance), underwriters consider the person’s driving record.

Within the broad field of property and casualty, underwriters may specialize even further, into commercial (business) insurance or personal insurance. They may also specialize by the type of policy, such as insuring automobiles, boats (marine insurance), or homes (homeowners’ insurance).

Work Environment

Insurance underwriters
Most underwriters work full time.

Insurance underwriters held about 103,400 jobs in 2014. The industries that employed the most insurance underwriters were as follows:

Direct insurance (except life, health, and medical) carriers 47%
Insurance agencies and brokerages 14
Direct health and medical insurance carriers 7
Other insurance related activities 5
Management of companies and enterprises 4

Underwriters work indoors in offices. Some property and casualty underwriters may visit properties to assess them in person.

Work Schedules

Most underwriters work full time.

How to Become an Insurance Underwriter

Insurance underwriters
Most firms prefer to hire applicants with a bachelor’s degree.

Employers prefer to hire candidates who have a bachelor’s degree. However, insurance-related work experience and strong computer skills may be enough. Certification is generally necessary for advancement to senior underwriter and underwriter manager positions.

Education

Most firms prefer to hire applicants who have a bachelor’s degree. Courses in business, finance, economics, and mathematics are particularly helpful.

Training

Beginning underwriters usually work as trainees under the supervision of senior underwriters. Trainees work on basic applications and learn the most common risk factors. As they gain experience, they become responsible for more complex applications and work independently.

Licenses, Certifications, and Registrations

Employers often expect underwriters to become certified through coursework. Courses are important for keeping current with new insurance policies and for adjusting to new technology and changes in state and federal regulations. Certification is often necessary for advancement to senior underwriter and underwriter management positions. Many certification options are available.

For underwriters with at least 3 years of insurance experience, The Institutes offer the Chartered Property and Casualty Underwriter (CPCU) designation. For beginning underwriters, The Institutes offer a training program.

The Institutes also offer two special designations: Associate in Commercial Underwriting (AU) and Associate in Personal Insurance (API). To earn either the AU or API designation, underwriters complete a series of courses and exams that generally take 1 to 2 years.

The National Association of Insurance and Financial Advisors offers an introductory course in basic insurance concepts: the Life Underwriter Training Council Fellow (LUTCF). The American College of Financial Services offers the Chartered Life Underwriter (CLU) certification.

Important Qualities

Analytical skills. Underwriters must be able to evaluate information from a variety of sources and solve complex problems.

Decisionmaking skills. Underwriters must consider the costs and benefits of various decisions and choose the appropriate one.

Detail oriented. Underwriters must pay attention to detail, because each individual item on an insurance application can affect the coverage decision.

Interpersonal skills. Underwriters need good communication and interpersonal skills because much of their work involves dealing with other people, such as insurance agents.

Math skills. Determining the probability of losses on an insurance policy and calculating appropriate premiums require mathematical ability.

Pay

Insurance Underwriters

Median annual wages, May 2014

Financial specialists

$66,220

Insurance underwriters

$64,220

Total, all occupations

$35,540

 

The median annual wage for insurance underwriters was $64,220 in May 2014. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $39,260, and the highest 10 percent earned more than $113,010.

In May 2014, the median annual wages for insurance underwriters in the top industries in which they worked were as follows:

Direct health and medical insurance carriers $64,290
Other insurance related activities 64,160
Direct insurance (except life, health, and medical) carriers 63,700
Management of companies and enterprises 62,130
Insurance agencies and brokerages 61,680

Most underwriters work full time.

Job Outlook

Insurance Underwriters

Percent change in employment, projected 2014-24

Financial specialists

10%

Total, all occupations

7%

Insurance underwriters

-11%

 

Employment of insurance underwriters is projected to decline 11 percent from 2014 to 2024. Automated underwriting software allows workers to process applications more quickly than before, reducing the need for underwriters. As this technology improves, more underwriting decisions can be made automatically. However, there still will be a need for underwriters to evaluate automated recommendations, particularly in complex or specific fields, such as marine insurance.

Job Prospects

Job opportunities should be best for those with a background in finance and strong computer and analytical skills.

Employment projections data for insurance underwriters, 2014-24
Occupational Title SOC Code Employment, 2014 Projected Employment, 2024 Change, 2014-24 Employment by Industry
Percent Numeric

SOURCE: U.S. Bureau of Labor Statistics, Employment Projections program

Insurance underwriters

13-2053 103,400 91,600 -11 -11,700 [XLSX]

State & Area Data

Occupational Employment Statistics (OES)

The Occupational Employment Statistics (OES) program produces employment and wage estimates annually for over 800 occupations. These estimates are available for the nation as a whole, for individual states, and for metropolitan and nonmetropolitan areas. The link(s) below go to OES data maps for employment and wages by state and area.

Projections Central

Occupational employment projections are developed for all states by Labor Market Information (LMI) or individual state Employment Projections offices. All state projections data are available at www.projectionscentral.com. Information on this site allows projected employment growth for an occupation to be compared among states or to be compared within one state. In addition, states may produce projections for areas; there are links to each state’s websites where these data may be retrieved.

Career InfoNet

America’s Career InfoNet includes hundreds of occupational profiles with data available by state and metro area. There are links in the left-hand side menu to compare occupational employment by state and occupational wages by local area or metro area. There is also a salary info tool to search for wages by zip code.

Similar Occupations

This table shows a list of occupations with job duties that are similar to those of insurance underwriters.

Occupation Job Duties ENTRY-LEVEL EDUCATION 2014 MEDIAN PAY
Actuaries

Actuaries

Actuaries analyze the financial costs of risk and uncertainty. They use mathematics, statistics, and financial theory to assess the risk that an event will occur, and they help businesses and clients develop policies that minimize the cost of that risk. Actuaries’ work is essential to the insurance industry.

Bachelor's degree $96,700
Budget analysts

Budget Analysts

Budget analysts help public and private institutions organize their finances. They prepare budget reports and monitor institutional spending.

Bachelor's degree $71,220
Claims adjusters, appraisers, examiners, and investigators

Claims Adjusters, Appraisers, Examiners, and Investigators

Claims adjusters, appraisers, examiners, and investigators evaluate insurance claims. They decide whether an insurance company must pay a claim, and if so, how much.

See How to Become One $62,300
Cost estimators

Cost Estimators

Cost estimators collect and analyze data in order to estimate the time, money, materials, and labor required to manufacture a product, construct a building, or provide a service. They generally specialize in a particular product or industry.

Bachelor's degree $60,050
Insurance sales agents

Insurance Sales Agents

Insurance sales agents contact potential customers and sell one or more types of insurance. Insurance sales agents explain various insurance policies and help clients choose plans that suit them.

High school diploma or equivalent $47,860
Loan officers

Loan Officers

Loan officers evaluate, authorize, or recommend approval of loan applications for people and businesses.

Bachelor's degree $62,620
Suggested citation:

Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2016-17 Edition, Insurance Underwriters,
on the Internet at http://www.bls.gov/ooh/business-and-financial/insurance-underwriters.htm (visited February 08, 2016).

Publish Date: Thursday, December 17, 2015