Underwriting is a department in the insurance or banking business which takes care of risk assessment for the company. The job of an underwriter involves assessment of financial and medical risks associated with an individual, who wishes to buy an insurance cover from the company. It is the underwriter who decides how much premium should be charged from the insured, depending on the individual's risk projection. These are the people who are entirely familiar with the company's policy packages and can advice on most suitable policy plan for an individual or a group. An underwriter's job basically involves office work and client interaction over the phone. Even though it is a desk job, a person has to put in a lot of time and effort. So if you are interested in this career, go on reading this article.
Requirements to Become an Underwriter
A degree in business management is usually required to get into underwriting. However, students with other degrees can also apply for the job. For candidates interested in property or mortgage underwriting, an additional course in finance, accounts or computer applications adds to the resume. For health and life insurance underwriting, a degree in medical or paramedical field becomes important, as health and life insurance underwriters have to assess the medical risk along with the financial risk involved with an individual.
Deciding on the Specialization
Underwriting has many variations and each one involves different kind of work. So, after a person has decided to opt for underwriting, the next step is to choose which field of underwriting he wants to go for. The various kinds of underwriting are health insurance underwriting, life insurance underwriting, general insurance underwriting, marine and aviation underwriting and so on. Every specialization requires some additional skills. So check where you fit in and choose that option as your career.
The job of an underwriter involves analyzing the insurance contract, keeping in mind, several factors like age, occupational hazards, health hazards, hazards due to location etc. The underwriting criterion has to be changed if there is a particular global scenario. For example, riots in a particular country increases the risk for the company if it insures a person from that location. If the underwriter is unaware of what is going on around the world, he might make a mistake while underwriting. It is therefore important for an underwriter to remain updated of the latest news and happenings around the world.
Underwriters do all their job on computers. A person who is well-versed with computer skills and is capable of handling it easily, will not have any problem in adjusting to the job. If you lack in computer skills, it is better to get familiar with it so that there is no difficulty in working. This is one of the reasons why candidates with additional degree in computers have a greater chance of getting in the underwriting workforce.
Underwriters need to communicate with other employees of the department, with employees of other departments, as well as with clients. Written and oral communication skills are a must, so that communication is easily. Using inappropriate language and inability to express will make it difficult for an underwriter to do his business.
Good Knowledge of Numbers
The underwriting process is all about numbers and calculations. A weak hand at accounting and mathematical skills will reduce the working ability of a person. Analyzing the actuarial data, which is a lot of numbers, is a part and parcel of an underwriter's job. A person can improve these skills by taking up a crash course in maths and accounts, so that he does not have to face any problem when the actual work begins.
For becoming a health insurance or life insurance underwriter, medical knowledge is extremely important. That is why companies usually prefer doctors and pharmacists for this field of underwriting. Analyzing medical reports like ECG, X-rays, blood reports, full medical reports etc., is a part of the job of a life insurance or health insurance underwriter. So, if you want to become one of them, go ahead and brush up your medical knowledge prior to the interview.
Gain Experience and Obtain Certifications
Taking up online training, internship programs or going for a job as a trainee, will actually help in gaining an upper hand. Many organizations also provide certifications to candidates who have taken up the required courses. Certificate courses are available for specific types of underwriting like mortgage underwriting, insurance underwriting, medical underwriting etc. These certifications provide an upper hand to such candidates when it comes to hiring. The Insurance Institute of America conducts advanced programs in specific areas, and awards the candidate with designations like Associate in Personal Insurance (API) and Associate in Commercial Underwriting (ACU). These designations are awarded after the candidate clears all the exams pertaining to it, which usually take around two years.
The job prospects of an underwriter are fair, but according to the U.S. Bureau of Labor Statistics, the hiring rate of underwriting professionals is expected to decrease by 4% between 2008 and 2018 primarily because new technologies and software are being developed to perform the duties of an underwriter. However, the need for professionals will always be there. So, if you like to examine every detail of a given information and have the prerequisites of becoming an underwriter, this career will surely help you in climbing the ladder of success.