CAREER ADVICE

If the house burns down, if the car is in an accident, if a person becomes sick or is injured or if a loved one dies, we expect that insurance will help recover some of the financial loss that occurred. Prior to each of the property damages, the owner of the property had determined that s/he wanted insurance to help offset some of the financial burden caused by the accident. In the case of health and life insurance, most people believe it is mandatory to have insurance to ward off possible financial disaster.

Who decides if, and how much, insurance will be paid? It’s really a two-part process. An individual applies for insurance and an employee of an insurance company known as an underwriter makes the decision as to whether or not the insurance will be granted. Examples of companies in Cedar Rapids that employ underwriters are United Fire and Casualty Company and Aegon USA. After an application for insurance is received, the underwriter will evaluate risks to the insurance company. An applicant with a history of claims may be subject to higher costs known as premiums or may not be able to receive any insurance. Just because you apply for insurance, it does not mean that you will be able to purchase insurance. In some cases the risk to the insurance company is so great that it will either completely deny coverage, or coverage will be granted but at a much higher premium. Thankfully, this is not the normal situation.

Who makes these decisions about granting insurance? It is an insurance underwriter. The insurance underwriter makes decisions after very carefully considering all the information on the application and using the skills mentioned here. Underwriters must have a broad knowledge of insurance coverages. The underwriter must have many skills, some of which are analytical, effective communication, decision making, problem solving and sound judgment. An underwriter must possess effective human relations skills, being flexible to adapt to constantly changing environment. An underwriter must also be able to use a computer. The underwriter has to work effectively in a team environment. Customer information must be kept confidential.

After graduating from high school, the student will most likely be required to further his or her education and receive a degree in business administration or finance, with courses or experience in accounting. Throughout their career, underwriters must develop their knowledge with continuing education. This is necessary not only for advancement but in order to stay current with changing business conditions. It is not uncommon for insurance companies to offer a tuition reimbursement plan to employees. According to Mr. Randy Ramlo, Executive Vice President at United Fire in Cedar Rapids, "Our best underwriters are people who have the sometimes rare combination of the love of details and very strong people skills."

In 1998 there were approximately 97,000 insurance underwriters in the U.S. The largest proportion of underwriters is in the property and casualty industry. More growth is anticipated in the health industry as laws are beginning to require health insurers to accept more applicants for insurance. Median income for insurance underwriters was $38,710 in 1998. Locally, entry level would be in the range of $30,000 with advancement in the range of $50,000 in earnings. Underwriters work in comfortable and pleasant offices and typically work a standard 40-hour week.

A resource for this article was the 2000-01 edition "Occupational Outlook Handbook," a publication of the US Government.

Return to Career Advice Home Page