How to Become an Insurance Underwriter
The review process called underwriting is a crucial step in the insurance industry that ensures insurance companies make good business decisions. When an application is submitted, it goes through a rigorous evaluation to determine whether the applicant is risky business or good business. Underwriters analyze information such as motor vehicle records and consumer reports to calculate premiums, assign surcharges and discounts, and categorize policyholders into appropriate tiers for their insurance rates.
To become an underwriter, you must obtain an agent or broker license to sell and discuss insurance policies. Each state has its own insurance laws and regulations, so licenses are applied for through the state. Licensees must complete a training course and pass a state exam to obtain a license. In most cases, you must be a resident of the state you wish to transact business in. Additionally, licensees must renew their licenses every few years through continuing education courses. The two most common types of insurance license are the Property and Casualty license, which includes auto, homeowners, and commercial insurance, among other types of policies; and the Life, Accident and Health license, which authorizes the licensee to transact business with life and health insurance. Underwriters may hold more than one license, but they often specialize in one type of insurance within a company.
Degrees are not required to become an underwriter, although many entry-level jobs favor candidates who hold bachelor’s degrees in business-related fields such as finance and accounting. Strong skills in computer applications, prioritization, decision-making, and efficient detail-oriented work are also key factors of the underwriter’s job. Entry-level positions generally offer on-site training. Experience in the insurance industry is a big bonus, since underwriters must thoroughly understand the concepts of insurance and risk management in order to effectively underwrite policyholders. And of course, a love of the industry and a desire to help people will always help in landing a position.
