Underwriter Job Description: Top Duties and Qualifications

Last updated: August 22, 2022

An Underwriter, or Loan Underwriter, is a financial professional responsible for assisting in the loan application process by determining the risk-level of working with an applicant. Their duties include researching a client’s credit, income and assets, reviewing applications based on policy guidelines and performing risk assessment reports.

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Underwriter duties and responsibilities

Underwriters perform many analytical tasks to fully review and assess an applicant to ensure their company provides the right amount of coverage or assistance. They often have the following responsibilities:

  • Collect, review and analyze an applicant’s relevant history and records
  • Obtain additional information about an applicant to determine coverage needs
  • Determine the level of risk for insuring or lending
  • Offer recommendations on whether or not to approve an application
  • Help agents determine premium costs
  • Evaluate insurance claims for accuracy and the coverage amount
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What does an Underwriter do?

Underwriters typically work at insurance agencies, banks and other financial institutions to approve insurance plans and loans for clients. They read each application to determine if an applicant qualifies for a loan or an insurance policy, confirming that all of the information on the applicant accurately reflects their risk level. They review an applicant’s personal documents such as their driving record, medical history, criminal record, credit report and income statements.

Underwriters look for patterns in financial data to determine which applications could have a high risk of financial losses. They assess a company’s losses and try to identify the main sources of loss to better inform the way they vet clients. After performing a risk assessment, the Underwriter decides who to approve and submits a statement explaining their decision.

Underwriter skills and qualifications

An Underwriter uses a variety of soft skills, technical skills and industry knowledge to accurately review applications, including:

  • Qualitative and quantitative analysis skills
  • Communication skills, including speaking and writing
  • Customer service skills
  • In-depth understanding of insurance coverage or loan products
  • Advanced knowledge of federal regulations and best practices of insurance or lending institutions
  • Project management and organization skills
  • Time management and prioritization skills
  • Decision-making and critical thinking skills

Underwriter salary expectations

Underwriters earn an average of $73,215 per year. Salary may depend on level of education, experience and geographical location.

Underwriter education and training requirements

Underwriter candidates are likely to have at least a bachelor’s degree in business, economics, finance or business. Many Underwriters receive on-the-job training, working with a more experienced Underwriter to learn best industry practices and company-specific practices. As part of their training period, entry-level Underwriters can manage lower value projects and then work their way up to higher-value policies. Candidates vying for a senior Underwriter position may also have completed additional training and become certified through the American Institute For Chartered Property Causality Underwriters.

Underwriter experience requirements

Entry-level Underwriters may not have previous experience in the role and can complete on-the-job training to get experience. Other relevant experience may include customer service, banking, insurance or other business roles. For roles that require specialized knowledge, complete advanced tasks or have leadership responsibilities may require years of experience as an Underwriter and certification. Candidates may be in pursuit of or have completed certification.

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Frequently asked questions about Underwriters

 

What is the difference between an Underwriter and an Actuary?

Underwriters and Actuaries are both risk assessment professionals who analyze a range of factors to identify the pros and cons of working with a client. The main difference between the roles is that Underwriters work with processing individual applications, making personalized decisions about who to approve. Actuaries research general business risks and liabilities, identifying vulnerabilities in a company’s structure and making recommendations to limit those risk factors. Underwriters predict the potential cost of taking on a particular client, projecting the likelihood that they will incur various expenses compared to the price of their plan.

Actuaries create statistical models that reflect general trends for common business risks, which Underwriters then use to inform their decision about whether to approve a client and if so, what the terms of their agreement should be. They both perform research, but Underwriters are likely to draw upon existing actuarial studies while Actuaries may need to conduct original research to assess risks.

 

What are the daily duties of an Underwriter?

Underwriters receive assignments from Loan Officers, who communicate with the client and help gather all of the necessary documentation. They start by reviewing the application and looking for any missing information that would impede the research process. Underwriters request financial documents to confirm the information in the application, tracking the progress of several accounts at once. They organize files and identify the key risk factors that could impact

They review statistics to determine how much they should charge each applicant for a policy or loan, writing quotes and negotiating the terms of an agreement. Underwriters make note of which applications they approved and rejected, comparing projected risks to the actual costs related to a policy or loan agreement. They keep detailed records of applications and use them to refine and adjust company policy on underwriting practices.

 

What are the characteristics of a good Underwriter?

Good Underwriters are practical people who use analytical, logical and strategic thinking to make wise business decisions. They’re excellent at performing research and using the data they collect to draw conclusions about the best way to approach different risks. Because underwriting involves using mathematical and statistical models, good Underwriters can quickly and accurately perform calculations based on all the variables of an application.

Successful Underwriters are detail-oriented individuals who can recognize the warning signs of a high-risk contract and determine possible solutions to mitigate the risk. To keep track of all of their clients, good Underwriters always stay organized and coordinate all of their tasks.

 

What are the different types of Underwriters?

There are several different kinds of Underwriters that specialize in approving clients for different types of agreements. These include Insurance Underwriters, Debt Security Underwriters, Mortgage Underwriters and Equities Underwriters. Each type is trained on identifying risks specific to their industry and measuring their impact. All types of Underwriters make recommendations about application approval policies to promote their employer’s financial health.

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