I have a soft spot for the underwriting profession, primarily because that’s where my own career got started. It has to be one of the least understood professions out there. My own story is typical. My senior year at Michigan State University (Go Spartans!) was filled with on-campus interviews with a variety of companies and job types. With an undergraduate degree in Socioeconomics (a blend of political science and economics), I wasn’t sure what sort of job awaited me. What I had going for me was a strong set of analytical and communication skills. As it turns out, that skill-set is well suited to insurance underwriting. But I didn’t know that then. When I interviewed with CIGNA (back when they were still in the property and casualty insurance business) I had to do some fast research to have the slightest clue about the job for which I was interviewing.
So what does an insurance underwriter do? At the very heart of the job, it comes down to deciding which risks the insurance company will accept and at what price/terms. Staff underwriters typically work in an insurance company home office and set guidelines for the types of risks that are acceptable to the company. Line underwriters apply those guidelines to the individual risk applications that they underwrite. That is an oversimplification of the job because underwriting requires thorough analysis of risks, interaction with insurance agents, loss control, claims, management, and more. Creativity and problem-solving skills are paramount because some risks may not be acceptable upon first review but creative application of loss control measures and insurance contract modifications can make it possible to accept a challenging risk. A win-win-win for the insurer, the agent, and the insured.
Rather than reinvent the wheel, take a look at this description of effective underwriting. I remember my early days as a brand new property and casualty insurance underwriter, and the relationships that I built with many commercial insurance agents. They knew that I was a “newbie” and I appreciated their patience with me, and many of them took the time to contribute to my early career education. An experienced underwriter is like gold to an agent because they have the stories and insights that help agents to write more business that fit within the underwriting appetite of the insurer. I moved on to an underwriting/marketing staff position, and then jumped over to a corporate risk management position before launching my own business. I didn’t spend enough time in my underwriting job to develop the kind of deep expertise that makes an underwriter extremely valuable. I respect the underwriting professionals who have developed that kind of expertise and make the industry work so well for the insurers, agents, and insureds. It’s a little-understood job, but a very rewarding and valued job. Go kiss an underwriter today.