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Insurance Underwriters

THE JOB

Insurance is protection against future financial loss from injury, illness, 
property damage, or liability for the losses of others.  INSURANCE 
UNDERWRITERS review applications for insurance coverage submitted to the 
company.  They evaluate the potential risk, and accept, reject, or modify 
the policy according to law or company standards.  Some Underwriters work 
for life or health insurance companies and usually specialize in either 
individual or group policies.  Others are employed in the property and 
liability field; they typically handle either personal insurance, such as 
automobile or homeowner policies, or commercial insurance.

Before deciding whether to accept or reject a policy, Underwriters 
investigate the factors affecting the probability of loss.  They analyze 
information on the policy application and collect additional data.  Life 
and health Insurance Underwriters study medical reports and also obtain 
detailed information about the applicant's occupation and involvement with 
hazardous sports or other risky activities.  In addition, they apply 
actuarial tables which give the statistical probability of loss based on 
actual experience of large groups of people over many years.  
Underwriters dealing with automobile insurance check an applicant's driving 
record and customary use of the vehicle.  For business property and 
liability policies, commercial Underwriters look into many aspects of a 
firm's operation; these include the physical condition of the property, 
protective devices and safety procedures used, and reports of safety 
inspections made by company loss control technicians or by independent 
inspection services.  Underwriters in all fields of insurance also study 
credit reports and financial statements to determine the applicant's 
ability to make the insurance payments.  During the review of renewal 
policies, they check the policyholder's claims record and may revise the 
amount of coverage.

After deciding that an applicant is an acceptable risk, underwriters 
usually determine the amount of the premium.  Rates may be set according to 
standardized classifications published in rate manuals, or revised to 
reflect individual or group risk variations.  Underwriters may also limit 
the coverage or modify other terms of the contract.

Underwriters frequently correspond with applicants, policyholders, agents, 
and branch managers about policy cancellations or requests for information. 
Some group Underwriters, along with Insurance Agents, attend meetings with 
union or employer representatives to discuss the types of policies 
available to their groups.


WORKING CONDITIONS

Life Insurance Underwriters usually work in the headquarters office of 
their company, while Casualty and Liability Underwriters may work in 
headquarters, regional, or branch offices, usually located in or near major 
metropolitan areas.  Most offices are large, modern, and equipped with the 
latest office machines and computers.  As a general rule, the industry 
provides good job security because most insurance is considered a necessity 
regardless of economic conditions.  Underwriting is a complex, demanding, 
and responsible job. Underwriters use considerable judgment in appraising 
risks, and their decisions are seldom reviewed at a higher level.  If 
Underwriters are too conservative or their rates are too high, the company 
may lose business to competitors.  But if risks are not properly evaluated 
or standards are stretched too far, the company may have too many claim 
losses.


EMPLOYMENT OUTLOOK

The following information is from the California Projections of Employment 
published by the Labor Market Information Division.

Estimated number of workers in 1993                  10,030
Estimated number of workers in 2005                  12,300
Projected Growth 1993-2005                              23%
Estimated openings due to separations by 2005         2,700

(These figures do not include self-employment or openings due to turnover.)

Employment of Underwriters is expected to increase at a rate slower than 
the average for all occupations through the year 2005.  More than half of 
all job openings are expected to result from the need to replace 
Underwriters who transfer to other occupations or stop working altogether.

The reasons for the continuing need for Underwriters are many:  shifts in 
the age distribution of the population; growing demand for insurance 
coverage for working women; expanding long-term healthcare and pension 
benefits for retirees; growing concerns for financial security and 
liability for more insurance protection for homes, automobiles, pleasure 
craft, and other valuables; and new or expanding businesses.

Insurance companies typically fill openings for Underwriters by hiring 
trainees. Company representatives go to college campuses to select 
qualified college graduates.  They report that there usually are far more 
applicants than trainee positions available.  Employers are very selective, 
and there is a good deal of competition for available jobs.


WAGES, HOURS, AND FRINGE BENEFITS

In California, the median hourly wage for Underwriters is $18.11.
Fringe benefits include paid vacations, holidays and sick leave, group life 
and health insurance, retirement programs, and sometimes profit sharing plans.
The workweek is normally 37-1/2 hours; overtime or evening work is rare.


ENTRANCE REQUIREMENTS AND TRAINING

Underwriting requires an analytical mind, attention to detail, good 
judgment, and decision-making ability.  Although Underwriters deal 
primarily with facts and figures, they must also be able to communicate 
effectively, both orally and in writing, and must get along well with 
others.

Employers usually expect trainees to have a bachelor's degree, preferably 
in business administration or with emphasis on business subjects.  
Recommended courses include economics, accounting, statistics, commercial 
law, and insurance principles.  Some employers start all trainees in 
support positions so they can learn each function thoroughly prior to being 
placed on the job doing actual underwriting  work.  Underwriters involved 
in commercial insurance are almost always expected to have both a degree 
and business experience.

Many schools offer courses in insurance and correspondence study programs 
are also available; however, insurance companies usually rely on their own 
training programs to teach Underwriters the basic job-related skills. 
Training programs combine formal classroom instruction and self-study 
workbooks with on-the-job training.  It requires six months to two years or 
more to become a journey-level Underwriter, depending on individual 
performance and the complexity of the work.  Most companies hold special 
seminars to keep experienced Insurance Underwriters up-to-date on new 
regulations, procedures, and changes in underwriting policy.


ADVANCEMENT

Continuing education is necessary for advancement.  Advancement comes first 
in the form of increased underwriting authority in one type or line of 
insurance. The trend is to move away from narrow specialization.  No longer 
does a Fire Underwriter sit at one desk and a Casualty Underwriter sit at 
another.  Instead, in many companies, Underwriters may receive advanced 
training and become most proficient in one line but will also have full 
working knowledge of other lines of insurance.  Senior Underwriters handle 
the most complex accounts or may advance to supervisory or managerial 
positions in branch, regional, or headquarters offices.


FINDING THE JOB

Many large companies recruit on college campuses.  Trainee positions are 
also listed with college placement services, public or private employment 
agencies, and the California Employment Development Department Job 
Services.  Direct application to company personnel departments is also 
recommended.  Announcements of trainee openings are usually posted in 
insurance company offices.


ADDITIONAL SOURCES OF INFORMATION

Insurance Institute of America
P. O. Box 3016
Malvern, PA 19355-0716
(610) 644-2100
www.aicpcu.org/

Insurance Information Institute
110 William Street
New York, NY 10038
(212) 669-9200
www.iii.org/


RELATED OCCUPATIONAL GUIDES

Insurance Adjusters, Examiners & Invests.     No.  67
Actuaries                                     No. 318
Insurance Sales Agents                        No. 455

OCCUPATIONAL CODE REFERENCES

DOT (Dictionary of Occupational Titles, 4th Ed.,1991)
Underwriter (insurance)                   169.267-046

OES (Occupational Employment Statistics) System
Underwriters                                   211020


Source: State of California, Employment Development Department,
        Labor Market Information Division, Information Services Group,
        (916) 262-2162