What Does An Insurance Underwriter Do?

Insurance is big business. Before insurance carriers agree to carry the risk that a person could die and a payout needs to be issued to his or her beneficiaries or that he could suffer a car accident, they need to make sure that the applicant is not someone who carries a high risk of actually making the claim. A driver who has had a driving history riddled with minor accidents and traffic violations is more likely to pay higher premiums (if his application won’t get denied outright) than someone who has kept his driving record clean. Insurance companies must know how to balance between accepting risk and being too cautious since tipping the scales too much in one direction could be detrimental to their operations.

The decision to determine whether an applicant should be granted insurance coverage lies in the hands of insurance underwriters. In a typical day, they review the applications forwarded to them by insurance agents and analyze the information there. They will then put in data in an underwriting software program that will automatically make recommendations on what coverage should be given and how much their premiums should be. Based on these recommendations, the underwriter will finally decide if the application should be approved or denied.

However, there are times when the information revealed by the underwriting software won’t be enough to make a decision on. For example, if an applicant already has a preexisting condition but has not had a recurrence of the illness for the past five years, the underwriter will look at other sources, such as his medical history to determine if the application can be approved. They will even contact the medical professionals and make other necessary inquiries as part of the underwriting process. If he deems it all right to take the risk, the underwriter will then decide if a higher premium needs to be charged.

Travel may be part of the job of some insurance underwriters. For example, those who are working with property insurance may need to make actual physical assessments of the property under question before making their decision. Most of the time, however, travel underwriters make their analysis and recommendations from the comfort of their offices.

Another important part of the job of insurance underwriters is conducting regular reviews of the portfolios of existing clients. Based on their findings, they will then make the necessary recommendations on whether to continue providing coverage or not.

Insurance underwriters must also keep themselves updated on the latest developments in the insurance industry. They can do this by cultivating relationships with brokers and staying updated on the trends in the industry from reliable sources. A formal method required by employers to ensure that their underwriters are kept updated on any technological and policy changes that would affect their work is to have them take coursework that would lead to certification. For example, underwriters with three years of experience can get certified as Chartered Property and Casualty Underwriter by The Institutes after finishing the necessary coursework.

Career Spotlight: Insurance Underwriter

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