Summary

insurance underwriters image
Insurance underwriters determine the risk of insuring a client.
Quick Facts: Insurance Underwriters
2016 Median Pay $67,680 per year
$32.54 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, 2016 104,100
Job Outlook, 2016-26 -5% (Decline)
Employment Change, 2016-26 -5,400

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 for some positions. Certification is generally necessary for advancement to senior underwriter and underwriter manager positions.

Pay

The median annual wage for insurance underwriters was $67,680 in May 2016.

Job Outlook

Employment of insurance underwriters is projected to decline 5 percent from 2016 to 2026. Automated underwriting software allows workers to process applications more quickly than before, reducing the need for as many 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 About this section

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
  • Review and update the rules that govern automation software

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.

For simple and common types of insurance, such as automobile insurance, underwriters can typically rely on automated recommendations. For more specific and complex insurance types, such as workers’ compensation, underwriters need to rely more on their own analytical insight.

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 policy being applied for. The underwriter would likely 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 the person’s 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 for automobiles, boats (marine insurance), or homes (homeowners’ insurance).

Work Environment About this section

Insurance underwriters
Most underwriters work full time.

Insurance underwriters held about 104,100 jobs in 2016. The largest employers of insurance underwriters were as follows:

Direct insurance (except life, health, and medical) carriers 47%
Insurance agencies and brokerages 19
Other insurance related activities 6
Direct health and medical insurance carriers 5
Credit intermediation and related activities 4

Underwriters work indoors in offices. Although underwriters spend most of their time working alone on applications at a computer, they sometimes must handle customer inquiries.

Some property and casualty underwriters may travel to assess properties in person.

Work Schedules

Most underwriters work full time.

How to Become an Insurance Underwriter About this section

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 for some positions. Certification is generally necessary for advancement to senior underwriter and underwriter manager positions.

Education

Most employers prefer to hire applicants who have a bachelor’s degree. Although a specific major is not required, some coursework in business, finance, economics, and mathematics is 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. Some companies offer training programs that include classroom instruction on the basics of underwriting.

As new underwriters gain experience, they work independently and handle more complex applications.

Licenses, Certifications, and Registrations

Employers often expect underwriters to become certified through coursework. These 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 2 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 several other designations in insurance specialties, including the Associate in Commercial Underwriting (AU) and Associate in Personal Insurance (API). To earn these designations, underwriters complete a series of courses and exams that generally takes 1 to 2 years.

The National Association of Insurance and Financial Advisors offers the Life Underwriter Training Council Fellow (LUTCF) designation, which consists of a three-part curriculum in basic insurance concepts.

The American College of Financial Services offers the Chartered Life Underwriter (CLU) certification. This certification consists of five core courses and three electives, and candidates must have 3 years of related work experience.

Important Qualities

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

Decisionmaking skills. The core function of an underwriter is making decisions, such as whether to offer insurance coverage and at what level to set premiums.

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 About this section

Insurance Underwriters

Median annual wages, May 2016

Financial specialists

$68,780

Insurance underwriters

$67,680

Total, all occupations

$37,040

 

The median annual wage for insurance underwriters was $67,680 in May 2016. 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 $40,160, and the highest 10 percent earned more than $121,430.

In May 2016, the median annual wages for insurance underwriters in the top industries in which they worked were as follows:

Credit intermediation and related activities $73,060
Direct health and medical insurance carriers 68,480
Direct insurance (except life, health, and medical) carriers 66,990
Insurance agencies and brokerages 66,690
Other insurance related activities 64,720

Most underwriters work full time.

Job Outlook About this section

Insurance Underwriters

Percent change in employment, projected 2016-26

Financial specialists

10%

Total, all occupations

7%

Insurance underwriters

-5%

 

Employment of insurance underwriters is projected to decline 5 percent from 2016 to 2026. Automated underwriting software allows workers to process applications more quickly than before, reducing the need for as many underwriters. As this technology improves and becomes more widely adopted in the insurance industry, more underwriting decisions will likely be made automatically.

However, there still will be a need for underwriters to review and update the criteria that run the automation. In addition, their analytical insight will still be needed in complex or specific insurance fields, such as workers’ compensation or marine insurance.

Demand for health insurance is also expected to increase and the health insurance industry is projected to grow faster than other insurance industry segments. Insurance underwriters working in health insurance are therefore likely to see stronger employment growth over the coming decade. Employment of insurance underwriters in the direct health and medical insurance carriers industry is projected to grow 15 percent from 2016 to 2026.

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, 2016-26
Occupational Title SOC Code Employment, 2016 Projected Employment, 2026 Change, 2016-26 Employment by Industry
Percent Numeric

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

Insurance underwriters

13-2053 104,100 98,600 -5 -5,400 employment projections excel document xlsx

State & Area Data About this section

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.

CareerOneStop

CareerOneStop 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 About this section

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

Occupation Job Duties ENTRY-LEVEL EDUCATION Help 2016 MEDIAN PAY Help
Actuaries

Actuaries

Actuaries analyze the financial costs of risk and uncertainty. They use mathematics, statistics, and financial theory to assess the risk of potential events, 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 $100,610
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 $73,840
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 $63,670
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 $61,790
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 $49,990
Loan officers

Loan Officers

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

Bachelor's degree $63,650
Suggested citation:

Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Insurance Underwriters,
on the Internet at https://www.bls.gov/ooh/business-and-financial/insurance-underwriters.htm (visited November 01, 2017).

Last Modified Date: Tuesday, October 24, 2017

What They Do

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Work Environment

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Pay

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State & Area Data

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Job Outlook

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2016 Median Pay

The wage at which half of the workers in the occupation earned more than that amount and half earned less. Median wage data are from the BLS Occupational Employment Statistics survey. In May 2016, the median annual wage for all workers was $37,040.

On-the-job Training

Additional training needed (postemployment) to attain competency in the skills needed in this occupation.

Entry-level Education

Typical level of education that most workers need to enter this occupation.

Work experience in a related occupation

Work experience that is commonly considered necessary by employers, or is a commonly accepted substitute for more formal types of training or education.

Number of Jobs, 2016

The employment, or size, of this occupation in 2016, which is the base year of the 2016-26 employment projections.

Job Outlook, 2016-26

The projected percent change in employment from 2016 to 2026. The average growth rate for all occupations is 7 percent.

Employment Change, 2016-26

The projected numeric change in employment from 2016 to 2026.

Entry-level Education

Typical level of education that most workers need to enter this occupation.

On-the-job Training

Additional training needed (postemployment) to attain competency in the skills needed in this occupation.

Employment Change, projected 2016-26

The projected numeric change in employment from 2016 to 2026.

Growth Rate (Projected)

The percent change of employment for each occupation from 2016 to 2026.

Projected Number of New Jobs

The projected numeric change in employment from 2016 to 2026.

Projected Growth Rate

The projected percent change in employment from 2016 to 2026.

2016 Median Pay

The wage at which half of the workers in the occupation earned more than that amount and half earned less. Median wage data are from the BLS Occupational Employment Statistics survey. In May 2016, the median annual wage for all workers was $37,040.