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What do Insurance Underwriters do?

By D. Jeffress
Updated Mar 02, 2024
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Insurance underwriters create insurance policies for individuals and businesses based a number of factors. An underwriter determines whether or not to insure a client based on careful analysis of previous records, objective statistics, and potential risks the client may face. Policies are written in a manner that offers the most protection to the insurance company against loss, while providing the client with the security of knowing that he or she will be compensated in the event of unfortunate situation.

Life and health insurance underwriters collect information about clients' past and present living conditions to determine the type of policies they need. An underwriter will carefully examine a client's medical records, investigate his or her working environment, and consider the needs of his or her immediate family. Statistics about a person's age, health status, and family history are compared with those of other policyholders. The underwriter calculates an appropriate policy amount and premium that must be paid by the client.

In property and casualty insurance companies, underwriters assess the risks of property damage due to natural disasters, fires, and thefts. When insuring a home or business, an underwriter considers the type, location, and condition of the establishment. He or she might investigate safety records and order an inspection before creating a policy. The underwriter must make careful decisions regarding the worth of a business or home and the potential amount the insurance company may be compelled to pay in the event of an accident.

Underwriters in the automobile insurance industry take several precautions before insuring a driver. An underwriter must perform exhaustive background checks on an individual to ensure that past driving records are accurate and not marred by several accidents and citations. He or she considers the type of car to be insured, the area in which it will primarily be driven, and the experience level of the driver. The underwriter compares data collected about the driver and vehicle with statistics for similar drivers, and creates a new policy accordingly.

Prospective insurance underwriters must typically obtain bachelor's degrees in business administration, accounting, or related fields. Many new underwriters engage in internships or training periods before working independently. Trainees assist established insurance underwriters while learning the trade firsthand. Many new underwriters seek additional certification in their specific fields by taking nationally recognized certifying exams.

Many experienced insurance underwriters are able to advance within their careers. After several years of experience, many professionals become underwriting supervisors or take other insurance related jobs in claims investigating or adjusting. Some underwriters advance to esteemed managerial roles within their companies, and others pursue underwriting careers in securities, real estate, and investment banking.

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