Students who enjoy working with numbers and have an eye for detail might consider entering the finance industry. One career possibility in this field is that of insurance underwriter. An insurance underwriter reviews insurance applications and establishes the terms under which insurance could be provided to an individual, business or other organization.
Curious about how to become an insurance underwriter? The basic insurance underwriter qualifications include earning a degree in the finance field and going through a period of on-the-job training. Continue exploring this career guide to learn how to get started.
What Does an Insurance Underwriter Do?
Insurance underwriters are typically employed by independent insurance brokerage firms and insurance companies. They are responsible for reviewing insurance applications and deciding whether to accept or reject them. If an application for insurance is accepted, the underwriter must determine the terms of the agreement, including the premiums and coverage amounts.
These days, advanced computer software helps to streamline these professionals’ work. The software will typically calculate recommended premiums and coverage amounts, which the insurance underwriter will then cross-reference against other information, such as an applicant’s credit scores or medical information. When making decisions, the professional must carefully weigh the risks of extending insurance to the applicant against the potential for profits for the company.
Most insurance underwriters can expect to carry out the following tasks on a daily basis:
- Review insurance applications, analyze information and enter information into a software program.
- Evaluate applicants’ risk criteria, such as credit scores and prior bankruptcy filings.
- Assess automated recommendations from underwriting software and apply analytical reasoning to develop a final determination.
- Collaborate with other professionals (e.g., field representatives and medical personnel) to acquire more information as needed.
- Respond to customer inquiries.
The majority of insurance underwriters work full time in an office setting; however, certain types of underwriters may need to travel, such as property and casualty underwriters who need to assess properties.
A Look at Common Insurance Underwriter Qualifications
The basic insurance underwriter qualifications include earning a bachelor’s degree and completing an employer-specific on-the-job training program. Depending on the specific employer, other qualifications will typically include the following:
- Computer literacy
- Mathematical ability
- Commitment to customer confidentiality and professional ethics
- Insurance underwriting certifications
Most insurance underwriters do not need to earn a graduate degree to begin a career in underwriting. Those who aspire to senior-level positions, however, may decide to return to school to earn a Master of Business Administration (MBA) after gaining at least a few years of work experience.
How To Become an Insurance Underwriter: An Overview
Unlike many careers in finance, such as certified financial planning, the process of becoming an insurance underwriter is relatively straightforward and quick. If you’re in high school, you can work on improving your mathematics skills by taking advanced-level math courses and joining relevant activities, such as a mathletes club. You may also wish to take advantage of job shadowing and internship opportunities in the insurance field, which can help you decide whether this career is the right choice for you.
Starting in your junior year of high school, you’ll need to explore bachelor’s degree programs in the finance field. An accounting degree is a versatile option.
After graduating, you can immediately begin looking for work as an insurance underwriter; you do not need to earn an advanced certification first. New hires typically go through the company’s on-the-job training program, which may last a few months. After you gain at least a couple of years of work experience, you may decide to enhance your career qualifications and expand your opportunities for advancement by earning a professional certification.
Earning an Insurance Underwriter Degree
After high school, the first step in becoming an insurance underwriter is to earn a bachelor’s degree. There is no one universal insurance underwriter degree requirement for aspiring underwriters; people come to the field with various types of degrees in finance, economics and mathematics. However, earning an accounting degree is a good choice.
An accounting degree will allow you to develop strong math skills and analytical reasoning abilities, as well as an understanding of business procedures and practices. Accounting students can expect to study topics such as the following:
- The principles of accounting, including objectives, theories and practices aligned with the Generally Accepted Accounting Principles (GAAP)
- The fundamentals of the accounting cycle, from transactions through financial statement preparation
- The application of managerial accounting data in business decision making, with a look at cost-volume-profit (CVP) analysis
- Descriptive and inferential business statistics
- Interpretation and analysis of financial statements, and practical applications of those analyses
When you have the opportunity to select elective courses, it’s a good idea to choose ones that will support your professional ambitions. For instance, you could take courses that will help you improve your computer literacy skills or understanding of data analytics.
Pursue Additional Underwriting Training While on the Job
Although you can land an entry-level job with just a bachelor’s degree, new insurance underwriters can expect a formal period of on-the-job training. Depending on the organization you work for, this period may last a few months. You’ll be paired with a senior underwriter or analyst who will supervise your work and provide guidance.
During your training period, you’ll become familiar with the software your organization uses, and you’ll work on processing applications. You’ll likely be given simple tasks initially, and then more complex tasks as you gain experience.
Your training period is an opportunity to prove yourself as a trustworthy, hard-working employee, and to learn the basic tools of your job. It’s critical to remain receptive to feedback from your workplace mentor. Remember that your mentor’s goal is to help you learn how to do your job well, so never hesitate to ask questions or request additional guidance on an assignment.
Earning an Insurance Underwriter Certification
Not all employers require their underwriters to earn a certification. Doing so, however, can open the doors to higher-level job positions, such as the role of senior underwriter or analyst. Various organizations administer certification programs, and the one you choose may be influenced by your employer’s preferences and your particular area(s) of insurance expertise.
For example, if you have at least two years of work experience, you may qualify to pursue the Chartered Property and Casualty Underwriter (CPCU) certification administered by The Institutes. This designation requires you to complete a series of online courses and virtual exams. The Institutes also offers several other certification options, such as the Associate in Commercial Underwriting (AU) or the Associate in Insurance (AINS) designations.
Other types of insurance certification options are available through the National Association of Insurance and Financial Advisors and the American College of Financial Services. They offer the Life Underwriter Training Council Fellow (LUTCF) designation and the Chartered Life Underwriter (CLU) certification, respectively.
If your employer requires you to earn a certification, you can generally expect that the organization will pay the associated fees. In some cases, your employer may also allow you to use work hours to study the course material and take the exams. Even if your employer doesn’t require you to be certified, you may be able to negotiate for fee reimbursement with your human resources department.
Regardless, earning an advanced certification will prove your expertise and increase your value as an employee. You’ll be better positioned to interview for senior-level positions and negotiate raises. Bear in mind that you may be required to periodically renew your certification.
Open the door to a rewarding career as an insurance underwriter or other finance professional by earning your bachelor’s degree at Grand Canyon University. The Colangelo College of Business offers numerous degree options for aspiring finance professionals, including the Bachelor of Science in Accounting degree program. Graduates will emerge with strong competencies in business and finance, including a solid understanding of professional ethics, financial accounting, financial statement analysis and much more.
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The views and opinions expressed in this article are those of the author’s and do not necessarily reflect the official policy or position of Grand Canyon University. Any sources cited were accurate as of the publish date.