Insurance Career Spotlight: Commercial Lines Underwriter


The primary job of an insurance underwriter is to determine the amount of risk inherent with insuring a client, and to use this risk assessment in deciding whether to cover the client. Commercial underwriters do this for business clients. If the underwriter decides to insure, he or she then evaluates how much coverage to offer and what the premiums will be.  

In order to make these decisions, the underwriter uses the information submitted on insurance applications, as well as a set of predetermined criteria, along with information gathered from interviews with field representatives, medical personnel and others. The underwriter also looks at recommendations given from underwriting software.

Underwriters are the primary liaison between insurance agents and insurance companies. With advances in technology and data analysis, underwriters often rely on software programs to crunch the numbers and make a recommendation on coverage and premiums. The underwriter will then use his own analytical insight and judgment to evaluate the recommendation and make a decision about whether to provide coverage and under what terms. If the situation is a complex one, the underwriter may consult other sources as well.

Underwriters analyze the risk factors associated with a potential client. One risk factor may be a past bankruptcy, for example. The underwriter must then determine if this particular risk factor is something that is relevant to the present application. The underwriter in this case would look at other circumstances related to the bankruptcy, such as how long ago it occurred and the current financial situation of the applicant.

The underwriter has to work to achieve a balance in weighing risk factors – if he or she routinely approves clients with too much risk, they may leave the insurance company open to payment of too many claims. On the other hand, if the underwriter is too conservative when weighing risk, and denies coverage to too many businesses, they may put their own company at risk because it will not be able to collect the amount in premiums needed to remain viable.

Job Requirements

Most underwriters have a college degree in an area such as business, finance, economics or mathematics. When starting out, most underwriters work under a more experienced person, handling basic applications and learning the most common risk factors.

Some of the skills employers look for in underwriters include analytical and decision making skills, math skills and interpersonal skills. The average salary is about $56,000 a year, with a range from $42,000 to $81,000, according to Glassdoor.

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