Insurance Underwriters

What Insurance Underwriters Do

Insurance underwriters evaluate insurance applications and decide whether to provide insurance, and under what terms.

https://www.youtube.com/watch?v=4PG3pK1Xv9o

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 $70,020 in May 2019.

Job Outlook

Employment of insurance underwriters is projected to decline 6 percent from 2019 to 2029. Automated underwriting software allows workers to process applications more quickly than before, reducing the need for as many underwriters.

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).

Insurance underwriters held about 114,700 jobs in 2019. The largest employers of insurance underwriters were as follows:

Direct insurance (except life, health, and medical) carriers 44%
Insurance agencies and brokerages 20
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.

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

Occupation Job Duties Entry-Level Education Median Annual Pay, May 2019

Actuaries

Actuaries use mathematics, statistics, and financial theory to analyze the financial costs of risk and uncertainty.

Bachelor’s degree $108,350

Budget Analysts

Budget analysts help public and private organizations plan their finances.

Bachelor’s degree $76,540

Claims Adjusters, Appraisers, Examiners, and Investigators

Claims adjusters, appraisers, examiners, and investigators evaluate insurance claims.

See How to Become One $66,540

Cost Estimators

Cost estimators collect and analyze data in order to estimate the time, money, materials, and labor required to make a product or provide a service.

Bachelor’s degree $65,250

Insurance Sales Agents

Insurance sales agents contact potential customers and sell one or more types of insurance.

High school diploma or equivalent $50,940

Loan Officers

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

Bachelor’s degree $63,270

For more information about property and casualty insurance, visit

Insurance Information Institute

For more information about certifications, visit

The Institutes

The American College of Financial Services

National Association of Insurance and Financial Advisors

O*NET

Insurance Underwriters


Suggested citation:

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