Insurance underwriters assess business risks and liability policies and make decisions about commercial property. They inspect the conditions of businesses’ properties, analyse inspection policies, assist with real estate and rent issues, prepare loan contracts and handle commercial risks in order to align them with business practices. Insurance underwriters analyse various information from prospective customers in order to assess the likelihood that they will report a claim. They work to minimise risk for the insurance company and make sure that the insurance premium aligns with the associated risks. They can be specialists in life insurance, health insurance, reinsurance, commercial insurance, mortgage insurance.
Insurance underwriters typically do the following:
- Review insurance applications for compliance and adherence
- Assess clients’ background information and financial status
- Liaise with specialists to gather information and opinions
- Weight loss exposures and determine underwriting alternatives
- Draw up a quotes for competitive insurance premiums
- Negotiate and define the specific terms of insurance policies with brokers or policyholders
- Keep detailed records of policies underwritten and decisions made
- Balance between mass and homogeneity of risks to achieve predictability of future results
- Develop and maintain a profitable book of business for the insurer
- Follow applicable insurance laws
For simple and common types of insurance, such as automobile insurance, underwriters typically rely on automated recommendations. For specific and complex insurance types, such as workers’ compensation, underwriters need to rely more on analytical insight.
Most insurance underwriters specialize in one of three broad fields: health, life, 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.
The following job titles also refer to insurance underwriter:
group insurance underwriter
commercial insurance underwriter
personal lines underwriter
public liability insurance underwriter
casualty insurance underwriter
commercial property underwriter
commercial lines underwriter
accident and sickness insurance underwriter
commercial property underwriters
fire insurance underwriter
automobile insurance underwriter
liability risk assessor
package insurance underwriter
Much of the work of insurance underwriters is done sitting at a desk entering data into a computer or analyzing data on a computer. Most of the interactions away from the computer are with insurance agents who rely upon the information provided by underwriters.
Insurance underwriters typically work full-time during standard business hours. Because of the nature of their work, there is little need or reason to have to work evenings or weekends.
Employers usually prefer to hire candidates who have a bachelor’s degree. A common field of degree is business. Coursework in finance, economics, and mathematics is helpful.
Some colleges and universities partner with local businesses to offer internships. These opportunities allow students to gain knowledge or practical experience through assisting in a variety of tasks, such as underwriting.
Beginning insurance underwriters typically work under the supervision of senior underwriters for up to 12 months. 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 may work independently and handle more complex applications.
ISCO skill level
ISCO skill level is defined as a function of the complexity and range of tasks and duties to be performed in an occupation. It is measured on a scale from 1 to 4, with 1 the lowest level and 4 the highest, by considering:
- the nature of the work performed in an occupation in relation to the characteristic tasks and duties
- the level of formal education required for competent performance of the tasks and duties involved and
- the amount of informal on-the-job training and/or previous experience in a related occupation required for competent performance of these tasks and duties.
Insurance underwriter is a Skill level 3 occupation.
Insurance underwriter career path
These occupations, although different, require a lot of knowledge and skills similar to insurance underwriter.
Long term prospects
These occupations require some skills and knowledge of insurance underwriter. They also require other skills and knowledge, but at a higher ISCO skill level, meaning these occupations are accessible from a position of insurance underwriter with a significant experience and/or extensive training.
Essential knowledge and skills
This knowledge should be acquired through learning to fulfill the role of insurance underwriter.
- Insurance law: The law and legislation concerning the policies of transferring risks or losses from one party, the insured, to another, the insurer, in exchange for a periodic payment. This includes the regulation of insurance claims and the business of insurance.
- Principles of insurance: Understand the principles of insurance, including third party liability, stock and facilities.
- Property law: The law and legislation that regulates all the different ways to handle property, such as the types of property, how to handle property disputes and property contract rules.
- Modern portfolio theory: The theory of finance that attempts to either maximise the profit of an investment equivalent to the risk taken or to reduce the risk for the expected profit of an investment by judiciously choosing the right combination of financial products.
- Business loans: Loans which are intended for business purposes and which can either be secured or unsecured depending on whether a collateral is involved. The different types of business loans such as bank loans, mezzanine finance, asset-based finance, and invoice finance.
- Actuarial science: The rules of applying mathematical and statistical techniques to determine potential or existing risks in various industries, such as finance or insurance.
- Real estate underwriting: The process of evaluating applications for loans in real estate activities in which not only the prospective borrower but also the property being traded in is evaluated in order to assess whether the property will be capable of redeeming its value.
- Claims procedures: The different procedures that are used to formally request a payment for a suffered loss from an insurance company.
- Types of insurance: The various types of risk or loss transfer policies that exist and their characteristics, such as health insurance, car insurance or life insurance.
Essential skills and competences
These skills are necessary for the role of insurance underwriter.
- Collect property financial information: Collect information concerning the previous transactions involving the property, such as the prices at which the property had been previously sold and the costs that went into renovations and repairs, in order to obtain a clear image of the property’s value.
- Review insurance process: Analyse all documentation related to a specific insurance case in order to ensure that the application for insurance or the claims process was handled according to guidelines and regulations, that the case will not pose significant risk to the insurer or whether claims assessment was correct, and to assess the further course of action.
- Create a financial plan: Develop a financial plan according to financial and client regulations, including an investor profile, financial advice, and negotiation and transaction plans.
- Decide on insurance applications: Assess applications for an insurance policy, taking into account the risk analyses and client information, in order to deny or approve the application and set in motion the necessary procedures following the decision.
- Provide support in financial calculation: Provide colleagues, clients or other parties with financial support for complex files or calculations.
- Create cooperation modalities: Prepare, determine and agree on the conditions for cooperation contracts with a company, by comparing products, following evolutions or shifts in the market and negotiating terms and prices.
- Obtain financial information: Gather information on securities, market conditions, governmental regulations and the financial situation, goals and needs of clients or companies.
- Manage financial risk: Predict and manage financial risks, and identify procedures to avoid or minimise their impact.
- Create insurance policies: Write a contract that includes all the necessary data, such as the insured product, the payment to be made, how often the payment is needed, the personal details of the insured and on what conditions the insurance is valid or invalid.
- Assess financial viability: Revise and analyse financial information and requirements of projects such as their budget appraisal, expected turnover, and risk assessment for determining the benefits and costs of the project. Assess if the agreement or project will redeem its investment, and whether the potential profit is worth the financial risk.
- Analyse financial risk: Identify and analyse risks that could impact an organisation or individual financially, such as credit and market risks, and propose solutions to cover against those risks.
Optional knowledge and skills
This knowledge is sometimes, but not always, required for the role of insurance underwriter. However, mastering this knowledge allows you to have more opportunities for career development.
- Financial statements: The set of financial records disclosing the financial position of a company at the end of a set period or of the accounting year. The financial statements consisting of five parts which are the statement of financial position, the statement of comprehensive income, the statement of changes in equity (SOCE), the statement of cash flows and notes.
- Real estate market: The trends concerning the buying, selling, or renting of property, including the land, buildings, and natural resources encompassed within the property; the categories of residential properties and properties for business purposes which such properties are traded in.
- Market analysis: The field of market analysis and research and its particular research methods.
- Credit control processes: The various techniques and procedures applied to ensure that credit is given to the suitable customers and that they pay on time.
- Insurance market: The trends and major driving factors in the insurance market, insurance methodologies and practices, and the identification of the major stakeholders in the insurance sector.
Optional skills and competences
These skills and competences are sometimes, but not always, required for the role of insurance underwriter. However, mastering these skills and competences allows you to have more opportunities for career development.
- Calculate insurance rate: Gather information on your client’s situation and calculate their premium on the basis of various factors such as their age, the place where they live and the value of their house, property and other relevant assets.
- Communicate with customers: Respond to and communicate with customers in the most efficient and appropriate manner to enable them to access the desired products or services, or any other help they may require.
- Explain financial technicalities to clients: Explain all details of financial products in plain words to clients, including financial terms and all costs.
- Analyse insurance needs: Gather information about the insurance needs of a client, and give information and advice about all possible insurance options.
- Prepare financial auditing reports: Compile information on audit findings of financial statements and financial management in order to prepare reports, point out improvement possibilities, and confirm governability.
- Develop investment portfolio: Create an investment portfolio for a customer that includes an insurance policy or multiple policies to cover specific risks, such as financial risks, assistance, reinsurance, industrial risks or natural and technical disasters.
- Assist in loan applications: Assist clients with filling out and managing their applications for loans by providing them with practical assistance, such as provision of relevant documentation and instruction on the process, and other advice such as any arguments they could bring forward to the lending organisation in order to secure the loan.
- Review investment portfolios: Meet with clients to review or update an investment portfolio and provide financial advice on investments.
- Synthesise financial information: Collect, revise and put together financial information coming from different sources or departments in order to create a document with unified financial accounts or plans.
- Interpret financial statements: Read, understand, and interpret the key lines and indicators in financial statements. Extract the most important information from financial statements depending on the needs and integrate this information in the development of the department’s plans.
- Examine credit ratings: Investigate and look for information on the creditworthiness of companies and corporations, provided by credit rating agencies in order to determine the likelihood of default by the debtor.
- Inform on renting agreements: Inform landlords or tenants of a property on the duties and rights of the landlord and tenant, such as the landlord’s responsibility for the upkeep of the property and the eviction rights in the event of a breach of contract, and the tenant’s responsibility to pay rent in a timely manner and avoid negligence.
- Conduct financial audits: Evaluate and monitor the financial health, the operations and financial movements expressed in the financial statements of the company. Revise the financial records to ensure stewardship and governability.
- Manage contracts: Negotiate the terms, conditions, costs and other specifications of a contract while making sure they comply with legal requirements and are legally enforceable. Oversee the execution of the contract, agree on and document any changes.
- Compare property values: Obtain information on the value of properties comparable to a property which is in need of valuation in order to make more accurate appraisals and assessments, or to set or negotiate the price at which the property can be sold or leased.
- Assess customer credibility: Communicate with customers to assess whether their true intentions are in line with what they claim in order to eliminate any risks from a potential agreement with the customer.
- Ensure proper document management: Guarantee that the tracking and recording standards and rules for document management are followed, such as ensuring that changes are identified, that documents remain readable and that obsoleted documents are not used.
- Apply technical communication skills: Explain technical details to non-technical customers, stakeholders, or any other interested parties in a clear and concise manner.
- Create underwriting guidelines: Create guidelines for the assessment of risks and determining whether acceptance of liability and granting payments is worth the risk for the organisation. Develop improved methods of analysis which ensure that all aspects of the underwriting process are examined.
- Estimate damage: Estimate damage in case of accidents or natural disasters.
- Negotiate loan agreements: Negotiate with banking professionals or other parties functioning as lenders in order to negotiate the interest rates and other aspects of the loan contract in order to obtain the most beneficial agreement for the borrower.
- Analyse insurance risk: Analyse the probability and size of the risk that is to be insured, and estimate the value of movable or immovable property of the client.
- Perform property market research: Research properties in order to assess their usefulness for real estate activities, using various methods such as media research and visitation of properties, and identify the potential profitability in the development and trading of the property.
- Identify clients’ needs: Identify the areas in which the client may require aid and investigate the possibilities for meeting those needs.
- Handle financial disputes: Handle disputes between individuals or organisations, either public or corporate, which deal with financial matters, accounts, and taxation.
- Manage contract disputes: Monitor issues that arise between the parties involved in a contract and provide solutions in order to avoid lawsuits.
- Organise a damage assessment: Organise a damage assessment by indicating an expert to identify and examine the damage, give information and instructions to experts and follow up on the experts, and write a damage report.
ISCO group and title
3321 – Insurance representatives
- Insurance underwriter – ESCO
- Insurance Underwriters : Occupational Outlook Handbook – U.S. Bureau of Labor Statistics
- Insurance Underwriter Job Description | Workable
- Insurance Underwriter Job Description: Salary, Skills, & More – Liveabout
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