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The insurance underwriting process is what is used to determine whether or not someone that is applying for any type of insurance is eligible to be insured by that insurance company. If deemed insurable that person will be assigned a monetary value for that insurance, known as the premium.

There are a lot of possibilities of what someone might be applying for insurance for and it’s the insurance underwriter’s job to make sure they use all of the tools at their disposal in order to determine the correct business cost and the specific terms for the insurance agreement.

Some of the types of risks the underwriter will assess are the following:

• Auto
• Property
• Sports
• Life
• Health
• Others

Not all of these are going to be underwritten the same way as they will all have a lot of variance on factors.

Tools Used

When it comes to underwriting the main tool as you could probably imagine would be the computer to run a lot of different formulas to make sure that writing a policy isn’t going to result in a loss to the company. Although the purpose of an insurance company is to issue policies they aren’t going to want to take on something they know is an adverse risk to the company.

The insurance underwriter is going to compile vast amounts of data that includes previous policies and will compare it to information with the current application/applicant. If the risks is considered high it doesn’t mean that the person will necessarily be denied; it simply means that there might be a higher premium attached to the policy. If it is deemed to simply be just too high of a risk the policy will not be issued and the application denied.

Categories and Subcategories

When it comes to insurance there are a lot of categories and then subcategories of. The insurance underwriter is going to work under one of four of the main categories:

1. Property/Casualty
2. Life
3. Health
4. Mortgage

There are some of these that might be covered under group policies. When there are group policies this will make the underwriting process more difficult as there are a lot more people that need to be looked at to build the base and come up with the correct monetary amount assessment.

Even if there is only one risky person in an entire group that can raise the premium for the entire policy as the group policy takes on the risk of every person in it. Most all of the time the underwriter will interview everyone involved in the potential policy.

There are also policies called blanket policies that will cover a “package” of risks rather than just one risk and multiple policies. For this reason the insurance underwriter is likely to hold the responsibility of knowing and understanding all of the insurance categories.

Training and Knowledge

Though an insurance underwriter will not require any formal training the insurance companies are likely going to have the job requirement of either a bachelor’s degree or several years of experience in the field. If you already work for an insurance company in sales or as a claims examiner it can be a lateral move within the company.

If you’re an inexperienced underwriter you’ll undergo some form of training in the insurance company before you begin your job either through a classroom setting or one-on-one training with an experienced underwriter.

There are always ongoing advancements when it comes to technology so insurance underwriting, like many jobs, will require ongoing continuing education to keep up with an updated field of knowledge.