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Insurance companies perform the vital function of protecting organizations or individuals from financial losses resulting from unforeseen circumstances. Risks are in the form of accidents, illnesses, and property damage. Companies assume billions of dollars in risk each year. Insurance underwriters basically determine whether or not insurance cover is to be provided, and if yes, then at what terms it should be provided. They analyze and evaluate the risk involved in a particular application. They have to ascertain the likelihood of a claim arising, by considering various factors and probabilities; for this, they seek detailed information from prospective clients. Thus, they figure out how risky it is for the company to insure any particular individual or business. This is often a tricky job, because risk assessments can go wrong, as well. Therefore, the salary of the underwriter is commensurate, with the complexity of proposals they handle.

General Job Description
Underwriters specialize in three major kinds of insurance: Life, Health, and Property and Casualty (P/C). Following is a general job description.
  • Study and evaluate various insurance proposals
  • Obtain and review medical, occupational, financial, and legal information pertaining to an individual or business
  • Calculation of risk and determination of the premium payable by individuals or organizations. Also, ensuring that the premiums are competitive.
  • Negotiating terms with prospective clients or their brokers
  • Writing policies and drawing up contracts
  • Liaising with consultants or specialists like doctors or surveyors for risk assessment
  • Specifying any of the precautions to be taken by the policyholder to safeguard his/her health or property
  • Taking decisions on whether risk is to be shared with a re-insurer
Qualifications Required
The minimum qualification required is a Bachelor's degree in any field, with some additional courses in Business Law and Accounting. Independent-study programs are available at the Insurance Institute of America. They provide courses to obtain the designation of Associate in Commercial Underwriting (ACU) and Associate in Personal Insurance (API). These courses generally last for 1 - 2 years. Effective communication and interpersonal skills are also a prerequisite for this job, as it involves negotiating and dealing with clients, brokers, and agents. Good working knowledge of computers is also essential. Ability to analyze and process information, while paying attention to detail; and good judgment for making sound decisions are other important requirements.

Salary
According to the United States Department of Labor, Bureau of Labor Statistics (BLS), as on May 2009, their salary range is within USD 35,000 and USD 99,000 annually. To be more precise, entry-level underwriters are earning up to USD 35,630 and the highest-paid annual wage is USD 99,420. The median annual wage is USD 57,820.

Industry-wise Annual Mean Wages

IndustryAnnual Mean Wage (USD)
Other Financial Investment Activities74,860
Management, Scientific, and Technical Consulting Services 71,390
Employment Services66,920
Local Government66,230
Insurance Carriers64,440
Nondepository Credit Inter-mediation64,280
Depository Credit Inter-mediation63,560
Management of Companies and Enterprises60,970
Agencies, Brokerages, and Other Insurance Related Activities60,760

State-wise Annual Mean Wages

StateAnnual Mean Wage (USD)
Connecticut76,700
Nebraska56,720
Kansas60,060
Iowa57,970
Illinois68,210
New York75,910
New Jersey71,880
Rhode Island69,710
Massachusetts69,710

There are very small differences in salary figures for underwriters in life insurance, and those in property and casualty (P/C) insurance. A life insurance underwriter can earn within the range of USD 37,000 to USD 78,000 annually, while the salary of the P/C ones is in the range of USD 40,000 to USD 90,000.

The salary figures mentioned above are as per May 2009 data of the BLS. Jobs in this field are expected to decrease in the future, because of the advent of new software that enable more work to be done in less time. However, several companies are expected to still rely on their agents for underwriting purposes, owing to the trust built over the years, and their accuracy in evaluating the risk.