Agency Underwriter Career: Pros and Cons
Underwriters are generally employed by insurance agencies to help people apply for various types of insurance and determine the specifics of policies, such as coverage amounts and premiums. Read on to find out some of the pros and cons of being an agency underwriter.
|Pros of Becoming an Agency Underwriter|
|Salary is above the national average ($70,000 as of May 2014)*|
|Strenuous physical activity is not required*|
|New health insurance laws will increase employment opportunities*|
|Most underwriters work in a clean, comfortable setting|
|Cons of Becoming an Agency Underwriter|
|Declining (-6%) job growth expected from 2012 to 2022*|
|Career advancement is dependent upon continuing education*|
|Job does not allow for much creativity*|
|Career is more susceptible to offshoring than others*|
Source: *U.S. Bureau of Labor Statistics (BLS).
Career Information on Agency Underwriters
As an insurance agency underwriter, your job would be to determine the terms of an insurance policy that your company offers a client. You'll use specific software to determine a potential policyholder's risk factors in order to come up with the cost of the insurance and the amount of potential payout. This requires you to strike a fine balance that keeps the customer happy with the insurance but ensures that the company doesn't have to pay too much in claims. Depending upon the type of insurance you're working with, factors that might go into this formulation include health, family history, lifestyle and age.
As a new underwriter, you'll start out as an assistant or trainee, working under the guidance of a senior underwriter in order to learn the trade. In some cases, an employer might offer a formal work-training program that can take from a few months to a year to complete.
The four broad areas of insurance that underwriters work in are property and casualty (P&C), health, mortgage and life insurance. Within the category of property and casualty insurance, you may also specialize in personal or business insurance, or in type of entity being insured, such as a home or an automobile.
In May 2014, the BLS reported that agency underwriters made a median salary of around $64,000 yearly, with the highest-paid 10% earning upwards of $113,000. If you were employed in Connecticut, Washington, New York, or New Jersey you were working in one of the best paying areas for this vocation. The top paying industry for agency underwriters was securities, commodity contracts, and other financial investment activities. Underwriters in that industry earned an average of around $95,000 as of May 2014.
Although no formal degree is associated with the position of agency underwriter, many employers prefer to hire people with bachelor's degrees. Courses in math, business, economics and finance are helpful for this career.
Interpersonal skills are a key part of this occupation. Employers look for candidates with experience in effective business communication. Due to the sensitive materials that an agency underwriter handles, employers seek people with excellent judgment and a keen eye for details. Other important qualities are analytical, decision-making and computer skills.
What Employers Want in Agency Underwriters
Employers generally request applicants with at least some insurance experience, preferably in the specific type that the company sells. Some job ads specify a preference for a bachelor's degree. Many specifically request familiarity with the Microsoft Office programs of Excel, Word, Outlook and PowerPoint. Find out what some employers were looking for in underwriter applicants in March 2012.
- In California, there is a part-time underwriter assistant position open to people proficient in Microsoft Excel, PowerPoint and Word. Experience with P&C insurance is desired.
- A Florida insurance company wants an agency underwriter with at least five years of experience in P&C underwriting. The ideal candidate has experience with rating programs and MS Office.
- An insurance business in Wisconsin needs an agency underwriter who has completed insurance courses. A bachelor's degree or equivalent experience is required.
- An employer in Kentucky requests an agency underwriter with experience assessing and examining jewelry. Excellent computer skills and a P&C license are required.
- A Minnesota farm and home insurance business requires an agency underwriter who has worked in property and casualty insurance. A bachelor's degree and experience in P&C farm insurance is preferred.
- In Pennsylvania, there is an opening for an agency underwriter for someone with a Pennsylvania Property and Casualty License and 3-5 years experience.
Standing Out as an Agency Underwriter
Gain the Necessary Computer Skills
Because many employers request familiarity with Microsoft Office, it's not a bad idea to make sure you can at least conduct basic functions in the programs mentioned above. You can do this by practicing on your home computer or taking the free online tutorials offered by Microsoft.
Get Insurance Training
If you're just starting out in the field, taking a course or two can help you learn the basics of underwriting and decide if the career is for you. The BLS points out that the Insurance Institute of America offers introductory training programs in personal insurance policies and business insurance policies with associated certification. These programs can last one to two years and require the completion of several classes.
As you progress in your career, you also might want to consider certification. The BLS mentions that the American Institute for Chartered Property and Casualty Underwriters offers the Chartered Property and Casualty Underwriter designation (CPCU) for those with three or more years of experience.
Other Career Choices
Insurance Sales Agent
If you like working in insurance but would rather be selling it, take a look into becoming an insurance sales agent. In this role, you would sell insurance policies to businesses or individuals. Most employers seek candidates with bachelor's degrees. You'll need to become licensed in the type of insurance that you sell and in each state that you sell it. This generally involves taking a series of courses and passing exams. Insurance sales agents made around $63,000 on average as of May 2011, according to the BLS.
If you like analyzing and working with numbers, you might consider becoming an accountant. In this career, you could work for an accounting firm, provide services to one specific business or become self-employed. Accountants help keep track of financial records and prepare taxes on behalf of a company or an individual. The minimum required education is usually a bachelor's degree in accounting, though some jobs require a master's degree. There are several different kinds of accountants, such as public accountants, management accountants and internal auditors. In order to become a Certified Public Accountant (CPA), you must become licensed, which involves obtaining a bachelor's degree, taking an additional 30 college credit hours in accounting and passing a national exam. In May 2011, the BLS reported that accountants made an average of about $70,000 annually.