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Description
Review individual applications for insurance to evaluate degree of risk involved and determine acceptance of applications.
Job Outlook
Employment of underwriters is expected to grow more slowly than average for all occupations through 2014. Underwriting software will continue to make workers more productive; however, because computer software does not do away with the need for human skills, employment will increase as economic and population growth result in increased insurance needs by businesses and individuals. Job opportunities should be best for those with a background in finance and strong computer and communication skills. In addition to openings arising from some job growth, openings will be created by the need to replace underwriters who transfer to another job or leave the occupation. Insurance carriers always are assessing new risks and offering policies to meet changing circumstances. Underwriters are needed particularly in the area of product development, where they assess risks and set the premiums for new lines of insurance. One new line of insurance being offered by life insurance carriers that may provide job opportunities for underwriters is long-term care insurance. Demand for underwriters also is expected to improve as insurance carriers try to restore profitability to make up for an unusually large number of underwriting losses in recent years. As the carriers' returns on their investments have declined, insurers are placing more emphasis on underwriting to generate revenues. This renewed interest in underwriting should result in job opportunities for underwriters. Because insurance is considered a necessity for people and businesses, there will always be a need for underwriters a profession that is less subject to recession and layoffs than other fields.
Job Nature
Insurance companies protect individuals and organizations from financial loss by assuming billions of dollars in risk each year. Underwriters are needed to identify and calculate the risk of loss from policyholders, establish appropriate premium rates, and write policies that cover this risk. An insurance company may lose business to competitors if the underwriter appraises risks too conservatively, or it may have to pay excessive claims if the underwriting actions are too liberal. With the aid of computers, underwriters analyze information in insurance applications to determine whether a risk is acceptable and will not result in a loss. Applications often are supplemented with reports from loss-control consultants, medical reports, reports from data vendors, and actuarial studies. Underwriters then must decide whether to issue the policy and, if so, the appropriate premium to charge. In making this determination, underwriters serve as the main link between the insurance carrier and the insurance agent. On occasion, they accompany sales agents to make presentations to prospective clients. Technology plays an important role in an underwriter's job. Underwriters use computer applications called "smart systems" to manage risks more efficiently and accurately. These systems automatically analyze and rate insurance applications, recommend acceptance or denial of the risk, and adjust the premium rate in accordance with the risk. With these systems, underwriters are better equipped to make sound decisions and avoid excessive losses. The Internet also has affected the work of underwriters. Many insurance carriers' computer systems are now linked to different databases on the Internet that allow immediate access to information, such as driving records, necessary in determining a potential client's risk. This kind of access reduces the amount of time and paperwork necessary for an underwriter to complete a risk assessment. Most underwriters specialize in one of three major categories of insurance: life, health, and property and casualty. Life and health insurance underwriters may further specialize in group or individual policies. Property and casualty underwriters usually specialize in either commercial or personal insurance and then by type of risk insured, as in fire, homeowners', automobile, marine, or liability insurance, or workers' compensation. In cases where casualty companies provide insurance through a single "package" policy covering various types of risks, the underwriter must be familiar with different lines of insurance. For business insurance, the underwriter often must be able to evaluate the firm's entire operation in appraising its application for insurance. an increasing proportion of insurance sales, particularly in life and health insurance, is being made through group contracts. A standard group policy insures everyone in a specified group through a single contract at a standard premium rate. The group underwriter analyzes the overall composition of the group to ensure that the total risk is not excessive. Another type of group policy provides members of a group, a labor union, for example, with individual policies reflecting their needs. These usually are casualty policies, such as those covering automobiles. The casualty underwriter analyzes the application of each group member and makes individual appraisals. Some group underwriters meet with union or employer representatives to discuss the types of policies available to their group.
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Schools Offering Degrees for
Insurance Underwriters |
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Career
Assessment
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