Underwriting analysts, also known as insurance underwriters, analyze and process paper and electronic applications for insurance companies. They play an integral role in the preliminary risk assessment process. Underwriting analysts interact with insurance agents to help potential customers secure insurance products and services. They learn their jobs by supervised on-the-job training and specific insurance coursework. Precise attention to detail, mathematical aptitude, communication and organizational skills are key traits of underwriting analysts.
Underwriting analysts initially examine insurance applications for legal compliance requirements and adherence to individual company guidelines. They determine how risk factors cause an acceptance, denial, early or long-term claim to the insurer. Underwriting analysts present their decisions to senior underwriters for approval or subsequent review. According to Lionel Macedo, a Vice President and chief underwriter at Transamerica International in his 2009 World Bank white paper on insurance, one of the key responsibilities of an underwriting analyst is to help their employers create a balanced portfolio of risks. Macedo noted that risk assessment is an art and science. He also highlighted that interactions by underwriting analysts with colleagues and superiors added another level of of difficulty to their jobs.
Education and Training
Aspiring underwriting analysts must have a high school diploma. Most entry-level underwriting positions require a bachelor's degree with a concentration in finance or business management. Ambitious underwriting analysts with significant computer skills and previous insurance-related experience can secure employment without a degree. Courses in business mathematics, economics, finance, risk and insurance are beneficial. Entry-level underwriting analysts work as trainees under the supervision of senior underwriters to learn how to process applications and assess a potential customer's risk factors. Certification designations are mandatory for underwriting analysts who aspire to senior level positions and management roles.
Underwriting analysts can take advantage of several certification designations to test their skills and increase employment opportunities. The American Institute for Chartered Property Casualty Underwriters offers two introductory credentialing courses: The Associate in Commercial Underwriting and the Associate in Personal Insurance. The American College also offers two certification programs: The Chartered Life Underwriter along with the Registered Health Underwriter. Underwriting analysts with at least two years of paid employment who have worked a minimum of 17.5 hours per week can pursue the chartered property casualty underwriter designation. Candidates must complete an ethics and code of professional conduct module with 50 questions as part of the certification process.
The U.S. Bureau of Labor Statistics reports that insurance underwriters earned a mean hourly salary of $32.46 and an annual mean wage of $67,520 as of May 2011. The lowest 10 percent of insurance underwriters earned $37,720 or less annually. The highest 10 percent of wage earners earned annual wages of $107,460 or more, according to the BLS. The insurance carriers sector had the highest mean salaries for insurance underwriters in industries with more than 1,820 workers: $32.91 per hour and $68,460 annually, according to the BLS.
According to the U.S. Bureau of Labor Statistics, the projected number of new jobs for insurance underwriters is estimated to increase by 6 percent, from 2010 to 2020. This projection is slower-than-average compared to an average 14 percent growth rate for all U.S. occupations. Automated software programs that reduce processing time will dampen the demand for new insurance underwriters. The BLS reports that two factors will create an increased future demand for insurance underwriters: An aging population that will require long-term care insurance and new federal health care reforms needed by consumers of all ages.
- The World Bank Premier Series on Insurance, September 2, 2009; The Role of the Insurance Underwriter; Lionel Macedo
- U.S. Bureau of Labor Statistics Occupational Employment Handbook: Insurance Underwriters-How to Become an Insurance Underwriter
- The Institutes: Chartered Property Casualty Underwriter (CPCU®)
- U.S. Bureau of Labor Statistics Occupational Employment Statistics: Employment and Wages, May 2011: Insurance Underwriters
- U.S. Bureau of Labor Statistics Occupational Employment Handbook: Insurance Underwriters-Job Outlook
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