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Job Description of a Small-Business Underwriter

by Johnny Kilhefner

Small-business underwriters review potential clients to determine whether a client is suitable for the small business, which may provide services or products such as health insurance, credit or loans. Small-business underwriters are trained to evaluate clients using certain methods to investigate the amount of danger potential clients pose to the business.

Types of Underwriters

Small-business underwriters work for health care or insurance companies and creditors or banks. No matter the employer, their skills are used to determine the risks associated with potential clients. This risk assessment tells the company whether or not it is a wise decision to deal with the client. The terms of coverage are then established by the underwriter, who writes case-specific stipulations for clients based on their risk assessment.

Assessing Risks

Small-business underwriters work to safeguard companies they work for. They focus on several main points when assessing the risks of clients for loans: the ability of a client to repay a loan, the client's willingness to repay the loan, and the client's existing assets and collateral. Underwriters assess ability to repay the loan by reviewing the client's income and expenses. They determine willingness to repay the loan by reviewing credit reports. To verify assets, underwriters check bank statements up to six months prior. The client's property is also appraised to determine if it matches the loan amount for collateral. Life and health insurance underwriters examine clients for potentially expensive risks, such as pre-existing medical conditions, and may ask for higher premiums or not insure them at all.

Risk Management Strategy

Companies employ underwriters to adopt risk management strategies. These strategies work to optimize the financial performance of the company. Underwriters must properly assess all risk factors and ensure the collection and use of accurate data through an ongoing integrity process. Underwriters must keep up with frequent changes in data to continually assess their organization's policies.

Other Considerations

A higher education degree isn't required to become an underwriter, but many small businesses prefer candidates with a bachelor's degree in business or a related field. An emphasis in accounting and business law is also encouraged. To advance their career, underwriters should continue expanding their knowledge of the field and remain up to date with their organizational rules and laws. According to Indeed, the average income for small-business underwriters is $75,000 a year.

About the Author

Johnny Kilhefner is a writer with a focus on technology, design and marketing. Writing for more than five years, he has contributed to Writer's Weekly, PopMatters, Bridged Design and APMP, among many other outlets.

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