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Degrees and Schools
Bachelor's degrees in finance or business administration or related subjects are preferred. The Insurance Institute of America offers a training program designed for beginning underwriters. The institute also offers the Associate in Commercial Underwriting for individuals interested in underwriting business insurance policies. The institute also provides an Associate in Personal Insurance Designation.
Classes
Useful subjects to study include:
- Economics
- Statistics
- Business
- Mathematics
- Accounting
- Business law
Online Classes and Programs
A lot of schools offer online programs in finance and business administration. Students should look for schools which have been accredited by agencies approved by the the United States Department of Education or the Council for Higher Education (CHEA).
Employment Requirements
There are no formal education requirements for the occupation. However, employers usually seek candidates that have a bachelor's degree in finance or business administration or a related subject. Employers also hire people that have a professional designation. Some of the large insurance companies provide work-study programs which take from a few months to a year to complete.
More than sixty percent of underwriters work for insurance carriers. Some underwriters work for organizations that provide insurance services to insurance companies and policyholders. A small number of insurance underwriters are employed by banks, mortgage companies and real estate firms.
How to Evaluate Schools and Programs
Answers to the following questions can be useful for selecting a school:
- Curriculum - Are there elective courses which are applicable to insurance underwriting?
- School's Reputation - Is the school nationally ranked? Is the school well known to local employers?
- Job Placement - What types of job placement services does the school provide? Does the school have job fairs?
- Class size - Are the class sizes small enough to allow the instructors to provide individualized attention?
- Financial Aid - What types of financial aid are available? Is the school qualified to provide federal financial aid?
- Accreditation - Is the school accredited by an organization that has a good reputation?
Insurance Underwriters Job Description
Basically, insurance underwriters determine if an insurance application should be approved and if so they also decide the terms. They have the important task of identifying and calculating an applicants risk of loss. If they are too liberal in approving applications the insurance company may end up paying excessive claims, however if the insurance underwriter is too cautious the insurance company could lose customers. Insurance underwriters also write the insurance policies that cover the risk. They also establish premiums and other charges.
Insurance underwriters typically specialize in fields such as mortgage, commercial accounts, health, life insurance and property/casualty. Some examples of their responsibilities are show below:
- Utilize "smart systems" to manage risk more effectively and accurately
- Determine the degree of risk of insurance applications
- Reject excessive risks
- Authorize reinsurance of policy when risk is high
- Apply ratings to make sure safe, profitable distribution of risks
- Evaluate the possibility of losses due to excessive insurance or a catastrophe
- Determine the amount of insurance in force on single risk or group of closely related risks
- Lower the value of the insurance policy when the risk is substandard
Resources
- Chartered Property Casualty Underwriters Society
- American Institute for CPU
- National Association of Health Underwriters
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