Commercial lines processing underwriters, or commercial line underwriters, work in the insurance industry. They are the professionals who underwrite our insurance policies, determining acceptance, coverages, coverage modifications and, sometimes, rejections. They analyze the risk associated with issuing a policy to a policy holder base on claim history, credit and other criteria.
The average annual base salary for a commercial lines underwriter in the United States is $59,000, according to Indeed.com (2009 data). This is an annual salary of 7 percent lower than the average salary for all occupations nationwide. According to the Bureau of Labor Statistics, "Employment of underwriters is expected to grow by 6 percent during the 2006-16 decade, which is slower than the average for all occupations. Underwriting software will continue to make workers more productive, but it does not do away with the need for human skills. As a result, employment of underwriters will increase as a growing economy and population expands the insurance needs of businesses and individuals."
Nature of the Work
Underwriting work is conducted in office buildings. The work environment is comfortable and climate-controlled. These jobs involve analyzing financial data, credit, claim history and applicant paperwork. This position is paperwork-intensive and requires long hours. Underwriters save policy holders billions of dollars per year in damages from car wrecks, fires, injuries and other costly disasters by underwriting insurance policies for them. The premium is based off of the conceived risk. The higher the risk, the higher the policy premium.
This career field requires a bachelor's degree in insurance, business or risk management. In addition to the degree, becoming an underwriter requires an insurance license as well as an underwriter's license. These opportunities also require several years of insurance-related experience. The underwriter is required to have excellent analytical skills and experience with statistics. Underwriters must be familiar with state statutes regarding insurance. They must be team players, commit to long hours and have the ability to meet deadlines.
Underwriters must review and analyze the applications for new insurance policies. They must provide quotes, underwrite new business, issue renewals, provide endorsements and complete their workload in a timely manner. They must perform modeling techniques on clients to establish premium rates. They must review client financial statements, make physical inspections and analyze other related underwriting data to determine risk levels for new policies. The underwriter also works as a liaison between the agents and the clients regarding issues of audits, work flow exigency, hit ratios, loss ratios and retention issues.
Career Track and Advancement
Although insurance companies may hire an underwriter candidate with a bachelor's degree in any field, they prefer a degree in statistics, business administration or finance. According to the Bureau of Labor Statistics, "Underwriting can be a satisfying career for people who enjoy analyzing information and paying attention to detail. In addition, underwriters must possess good judgment in order to make sound decisions." This career choice requires extensive continuing education for advancement. The underwriter must keep abreast of all industry changes, regulations and standards. They must take continuing education classes to keep their license in effect. The American Institute for Chartered Property Casualty Underwriters awards the license of Chartered Property and Casualty Underwriter (CPCU). This requires passing eight courses and meeting the minimum of three years of insurance industry experience. The first five years are usually spent graduating to more advanced roles, starting with that of client representative and followed by client manager and business producer.
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