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• INDEX
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• OVERVIEW OF THE

Insurance Underwriters
2008-18
PROJECTIONS
• MANAGEMENT
MANAGEMEN • Nature of the Work
T
BUSINESS • Training, Other Qualifications, and Advancement
AND
FINANCIAL • Employment
OPERATIONS
• PROFESSIONAL • Job Outlook
COMPUTER
• Projections
AND
MATHEMATIC • Earnings
AL
ARCHITECTS,
• Wages
SURVEYORS,
AND • Related Occupations
CARTOGRAPH
ERS
ENGINEERS
• Sources of Additional Information
DRAFTERS
AND
ENGINEERING
TECHNICIANS
LIFE
Significant Points
SCIENTISTS
PHYSICAL
SCIENTISTS
SOCIAL • Most large insurance companies prefer to hire candidates
SCIENTISTS
AND who have a bachelor's degree or some insurance-related
RELATED
SCIENCE experience.
TECHNICIANS
COMMUNITY • Continuing education is necessary for advancement.
AND SOCIAL
SERVICES
• Employment is expected to decline slowly as the spread
LEGAL
of automated underwriting software increases worker
EDUCATION,
TRAINING, productivity
LIBRARY,
AND MUSEUM • Job opportunities should be best for those with strong
ART AND
DESIGN computer skills and a background in finance.
ENTERTAINER
S AND
PERFORMERS
, SPORTS
Nature of the Work About this section
AND Insurance companies protect individuals and organizations from
RELATED
MEDIA AND financial loss by assuming billions of dollars in risk each year—
COMMUNICAT
ION-RELATED risks of car accident, property damage, illness, and other
HEALTH
DIAGNOSING occurrences. Underwriters decide whether insurance is provided
AND
TREATING and, if so, under what terms. They identify and calculate the risk
HEALTH
TECHNOLOGI of loss from policyholders, establish who receives a policy,
STS AND
TECHNICIANS determine the appropriate premium, and write policies that
 OTHER cover this risk. An insurance company may lose business to
PROFESSION
AL AND competitors if risk underwriting is too conservative, or it may
RELATED
OCCUPATION have to pay excessive claims if the underwriting actions are too
S
• SERVICE liberal.
HEALTHCARE
SUPPORT
PROTECTIVE Using sophisticated computer software, underwriters analyze
SERVICE
FOOD information in insurance applications to determine whether a risk
PREPARATIO
N AND is acceptable and will not result in a loss. Insurance applications
SERVING
RELATED often are supplemented with reports from loss-control
BUILDING
AND representatives, medical reports, reports from data vendors, and
GROUNDS
CLEANING actuarial studies. Underwriters then must decide whether to
AND
MAINTENANC issue the policy and, if so, determine the appropriate premium.
E
PERSONAL In making this determination, underwriters consider a wide
CARE AND
SERVICE variety of factors about the applicant. For example, an
OTHER
SERVICE underwriter working in health insurance will consider age, family
OCCUPATION
S history, lifestyle, and current health, whereas an underwriter
• SALES
SALES working for a property-casualty insurance company is concerned
OCCUPATION
S
with the causes of loss to which property is exposed, such as
OTHER SALES
hurricanes or earthquakes, and the safeguards taken by the
AND
RELATED
OCCUPATION
applicant. Therefore, underwriters serve as the main link
S
between the insurance carrier and the insurance agent.
• ADMINISTRATIVE
FINANCIAL
CLERKS Technology plays an important role in an underwriter's job.
INFORMATIO
N AND Underwriters use computer applications called “smart” systems
RECORD
CLERKS to calculate risks more efficiently and accurately. Such systems
MATERIAL
RECORDING, —also known as “automated underwriting systems”—analyze
SCHEDULING,
DISPATCHING and rate insurance applications, recommend acceptance or
AND
DISTRIBUTIN
G
denial of the risk, and adjust the premium rate according to the
MISCELLANE
risk. To start the process, underwriters create software rules to
OUS OFFICE
AND
screen applicants based on certain criteria, such as income and
ADMINISTRAT
IVE SUPPORT
OCCUPATION
credit score for mortgage applicants or age and family medical
S
OTHER history for life insurance applicants. After the software completes
OFFICE AND
ADMINISTRAT
its assessment, underwriters can either approve or refute the
IVE SUPPORT
decision, or, if it is questionable, request additional information
• FARMING
 FARMING, from the applicant. These automated systems allow underwriters
FISHING, AND
FORESTRY to quickly make decisions and, in most cases, effectively make
OCCUPATION
S sound judgments and minimize losses.
OTHER
FARMING,
FISHING, AND The Internet also has aided underwriters in their work. Many
FORESTRY
OCCUPATION
S
insurance carriers' computer systems are linked to various
• CONSTRUCTION databases on the Internet that allow immediate access to
• INSTALLATION
ELECTRICAL information—such as driving records and credit scores—
AND
ELECTRONIC necessary in determining a potential client's risk. This kind of
EQUIPMENT
MECHANICS, access reduces the time and paperwork needed for an
INSTALLERS
AND underwriter to complete a risk assessment.
REPAIRERS
VEHICLE AND
MOBILE Although there are many lines of insurance work, most
EQUIPMENT
MECHANICS,
INSTALLERS,
underwriters specialize in one of four broad categories: life,
AND
REPAIRERS health, mortgage, and property and casualty. Life and health
MISCELLANE
OUS
insurance underwriters may further specialize in individual or
INSTALLATIO
N, group policies.
MAINTENANC
E, AND
REPAIR An increasing proportion of insurance sales, particularly in life
OCCUPATION
S and health insurance, are being made through group contracts.
OTHER
INSTALLATIO A standard group policy insures everyone in a specified group
N,
MAINTENANC through a single contract at a standard premium. The group
E, AND
REPAIR underwriter analyzes the overall composition of the group to
• PRODUCTION
ASSEMBLERS ensure that the total risk is not excessive. Another type of group
AND
FABRICATOR policy provides members of a group—senior citizens, for example
S
FOOD —with individual policies that reflect their particular needs.
PROCESSING
METAL These usually are casualty policies, such as those covering
WORKERS
AND PLASTIC automobiles. The casualty underwriter analyzes the application
WORKERS
PRINTING of each group member and makes individual appraisals. Some
TEXTILE,
APPAREL,
group underwriters meet with union or employer representatives
AND
FURNISHINGS to discuss the types of policies available to their group.
WOODWORK
ERS
PLANT AND Property and casualty underwriters specialize in either
SYSTEM
OPERATORS commercial or personal insurance and then by type of risk
MISCELLANE
OUS
insured, such as fire, homeowners', automobile, or marine. In
 PRODUCTION cases where property-casualty companies provide insurance
OCCUPATION
S through a single “package” policy covering various types of
OTHER
PRODUCTION risks, the underwriter must be familiar with different types of
OCCUPATION
S insurance. For business insurance, the underwriter should be
• TRANSPORTATION
AIR able to evaluate the firm's entire operation in appraising its
TRANSPORTA
TION application for insurance.
MOTOR
VEHICLE
OPERATORS Work environment. Underwriters mainly have sedentary desk
RAIL
TRANSPORTA jobs that do not require strenuous physical activity. Most
TION
WATER underwriters are based in a company headquarters or regional
TRANSPORTA
TION branch office, but they occasionally attend meetings away from
MATERIAL
MOVING home. Construction and marine underwriters frequently travel to
OCCUPATION
S inspect worksites and assess risks.
• ARMED FORCES
• SPECIAL FEATURES
SOURCES OF Although some overtime may be required, underwriters typically
CAREER
INFORMATIO
work a standard 40-hour week. Those in managerial positions
N
FINDING AND often work more than 40 hours per week.
APPLYING
FOR JOBS
AND
EVALUATING
OFFERS
OCCUPATION
AL
INFORMATIO
N INCLUDED
IN THE
HANDBOOK
DATA FOR
OCCUPATION
S NOT
COVERED IN
DETAIL
ASSUMPTION
S AND
METHODS
USED IN
PREPARING
EMPLOYMENT
PROJECTIONS
OCCUPATION
AL
INFORMATIO
N NETWORK
COVERAGE
ACKNOWLED
GEMENTS
IMPORTANT
NOTE
ADDITIONAL
INFORMATIO
N ABOUT THE
 2008-18
PROJECTIONS

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Insurance underwriters review insurance applications and

determine the appropriate premium to charge a customer.

Training, Other Qualifications, and

Advancement About this section
Although there are no formal education requirements for
becoming an underwriter, employers prefer candidates who have
either a bachelor's degree or insurance-related experience and
strong computer skills. Much of what an underwriter does may
be learned through on-the-job training, so the majority of
underwriters start their careers as trainees.

Education and training. For entry-level underwriting jobs,

most large insurance companies prefer college graduates who
have a degree in business administration or finance. However, a
bachelor's degree in almost any field—plus courses in business
law and accounting—provides a good general background and
may be sufficient to qualify entry-level jobseekers. Because
computers are an integral part of most underwriters' jobs, some
coursework with computers is also beneficial. Still, many
employers prefer to hire candidates who have several years of
related experience in underwriting or insurance.

New employees usually start as underwriter trainees or assistant

underwriters. Under the supervision of an experienced risk
analyst, beginning underwriters may help collect information on
applicants and evaluate routine applications. Property and
casualty trainees study claims files to become familiar with
factors associated with certain types of losses. Many larger
insurers offer work-study training programs, which generally last
from a few months to a year. As trainees gain experience, they
are assigned policy applications that are more complex and
cover greater risks.

The computer programs many underwriters use to assess risk

are continually being updated, so on-the-job computer training
may continue throughout an underwriter's career.

Other qualifications. Underwriters must pay attention to detail

and possess good judgment to make sound decisions.
Additionally, good communication and interpersonal skills are
beneficial because much of the underwriter's work involves
dealing with agents and other professionals.

Certification and advancement. Continuing education is

necessary for advancement, because changes in tax laws,
government benefits programs, and other State and Federal
regulations can affect the insurance needs of clients and
businesses. Independent-study programs for experienced
underwriters are also available. The Insurance Institute of
America offers a training program for beginning underwriters.
The Institute also offers the designation of Associate in
Commercial Underwriting (ACU) for those starting a career in
underwriting business insurance policies, or an Associate in
Personal Insurance (API) for those interested in underwriting
personal insurance policies. To earn either the ACU or API
designation, underwriters complete a series of courses and
examinations that generally last 1 to 2 years.

The American Institute for Chartered Property Casualty

Underwriters awards the Chartered Property and Casualty
Underwriter (CPCU) designation to experienced underwriters.
Earning the CPCU designation requires passing eight exams,
having at least 3 years of insurance experience, and abiding by
the Institute's and CPCU Society's code of professional ethics.

The American College offers the equivalent Chartered Life

Underwriter (CLU) designation and the Registered Health
Underwriter (RHU) designation for life and health insurance
professionals. For those new to the industry, the American
College also offers the Life Underwriter Training Council Fellow
(FUTCF), an introductory course that teaches basic insurance
concepts.

Experienced underwriters who complete courses of study may

advance to senior underwriter or underwriting manager
positions. Some underwriting managers are promoted to senior
managerial jobs, but these managers often need a master's
degree. Other underwriters are attracted to the earnings
potential of sales and, therefore, obtain State licenses to sell
insurance and related financial products as agents or brokers.

Employment About this section

Insurance underwriters held about 102,900 jobs in 2008.
Insurance carriers employed 67 percent of all underwriters. Most
of the remaining underwriters work in insurance agencies and
brokerages.

Most underwriters are based in the insurance company's home

office. But some, mainly in the property and casualty area, work
out of regional branch offices of the insurance company. These
underwriters usually have the authority to underwrite most risks
and determine an appropriate rating without consulting the
home office.

Job Outlook About this section

Although employment is expected to decline slowly, job
prospects will remain good because of high turnover.

Employment change. Employment of underwriters is expected

to decline 4 percent during the 2008-18 decade. Demand for
underwriters will continue to be offset by automation and
technological advancement—factors that have resulted, in large
part, to stagnant employment levels over the past two decades.
For example, upgrades to underwriting software have helped
increase underwriter productivity. Automated underwriting
quickly rates and analyzes insurance applications, reducing the
need for underwriters. In addition, adoption of this technology
into other segments of insurance, such as life and health and
long-term care, will continue to impede employment growth
through the projection period, although at a slower rate than in
the past. Nonetheless, even as automated underwriting
continues to be adopted and upgrades to underwriting software
makes workers more productive, the need for humans to verify
information will continue.

Additionally, some demand for underwriters may arise as

insurance carriers try to restore profitability. As the carriers'
returns on their investments have declined, insurers may place
more emphasis on underwriting to generate revenues. An
expected increase in sales of health insurance and long-term
care insurance, designed specifically for the elderly, also may
result in some new jobs. As members of the baby-boom
generation grow older and a growing share of the Nation's
population moves into the older age groups, more people are
expected to purchase these kinds of insurance products.

Job prospects. Job opportunities should be best for those with

experience in related insurance jobs, a background in finance,
and strong computer and communication skills. The need to
replace workers who retire or transfer to another occupation will
create many job openings. In fact, high turnover will account for
most job openings. High turnover among underwriters results, in
part, from the limited upward mobility of workers in the
occupation—a scenario that is likely to continue through the
projections decade (2008-18).

New and emerging fields of insurance may also be a source of

job opportunities for underwriters. Insurance carriers are always
assessing new risks and offering new types of policies to meet
changing circumstances. Underwriters are needed particularly in
product development, where they assess risks and set the
premiums for new lines of insurance. Growing demand for long-
term care insurance—a relatively new product offered by
insurance carriers—may also provide some job opportunities for
underwriters.

Projections Data About this section

Projections data from the National Employment Matrix
Per
cen
Number t
Insuranc
13-
e [PD [XL
205 102,900 98,700 -4,300 -4
underwri F] S]
3
ters
NOTE: Data in this table are rounded. See the discussion of the
employment projections table in the Handbook introductory chapter
on Occupational Information Included in the Handbook.

Earnings About this section

Median annual wages of wage and salary insurance underwriters
were $56,790 in May 2008. The middle 50 percent earned
between $43,490 and $76,700 a year. The lowest 10 percent
earned less than $35,010, and the highest 10 percent earned
more than $99,940. Median annual wages of underwriters
working with insurance carriers were $57,480, while
underwriters' median annual wages in agencies, brokerages, and
other insurance-related activities were $54,410.

Insurance companies usually provide better-than-average

benefits, including retirement plans and employer-financed
group life and health insurance. Insurance companies usually
pay tuition for underwriting courses that their trainees complete,
and some also offer salary incentives.

For the latest wage information:

The above wage data are from the Occupational Employment
Statistics (OES) survey program, unless otherwise noted. For
the latest National, State, and local earnings data, visit the
following pages:
 insurance underwriters

Related Occupations About this section

Underwriters make decisions based on financial and statistical
data. Other occupations with similar responsibilities include the
following:

Accountants and auditors

Actuaries

Budget analysts

Cost estimators

Credit analysts

Financial managers

Loan officers

Other related jobs in the insurance industry include:

Claims adjusters, appraisers, examiners, and investigators

Insurance sales agents

Sources of Additional Information About this section

Disclaimer:
Links to non-BLS Internet sites are provided for your
convenience and do not constitute an endorsement.

Information about a career as an insurance underwriter is

available from the home offices of many insurance companies.

Information about the property-casualty insurance field can be

obtained by contacting:
 • Insurance Information Institute, 110 William St., New
York, NY 10038. Internet: http://www.iii.org
Information on the underwriting function and the CPCU and AU
designations can be obtained from:

• American Institute for Chartered Property and Casualty

Underwriters and Insurance Institute of America, 720
Providence Rd., Suite 100, Malvern, PA 19355. Internet:
http://www.aicpcu.org
• CPCU Society, 720 Providence Rd., Malvern, PA 19355.
Internet: http://www.cpcusociety.org
Information on the CLU and RHU designations can be obtained
from:

• The American College, 270 S. Bryn Mawr Ave., Bryn Mawr,

PA 19010. Internet: http://www.theamericancollege.edu

O*NET-SOC Code CoverageAbout this section

Get more information from O*NET—the Occupational
Information Network:
O*NET provides comprehensive information on key
characteristics of workers and occupations. For information on a
specific occupation, select the appropriate link below. For more
information on O*NET, visit their homepage.

• Insurance Underwriters (13-2053.00)

Suggested citation: Bureau of Labor Statistics, U.S. Department of Labor,

Occupational Outlook Handbook, 2010-11 Edition, Insurance Underwriters,
on the Internet at http://www.bls.gov/oco/ocos026.htm (visited December
08, 2010).

Last Modified Date: December 17, 2009

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