Are you a practical, analytical, and strategic thinker? Do you enjoy researching and drawing conclusions based on your findings? A career as an underwriter might be a good fit for you, where you can put those detail-oriented skills to work.
Underwriters are financial specialists who work in insurance agencies, banks, and other financial institutions. They are responsible for deciding whether or not to approve a borrower’s loan or insurance application. When a potential borrower applies for a loan or an insurance plan, the underwriter will be the one to evaluate the risk presented by the loan application. Determining risk is a complex process that requires good judgment and meticulous attention to detail. Underwriters determine this approval based on a number of credentials, including credit history, assets, driving record, medical history, criminal record, the size of the loan, appraisals, and any other relevant information based on the risk presented.
Underwriters look for patterns in financial data to determine which applications could have the highest risk of financial losses. After performing a risk assessment, the underwriter will approve or reject a loan, or request modifications by submitting a statement explaining their decision.
Sample job description
The underwriter is to issue credit decisions based on the documented borrower profile within the guidelines of the program and client requirements. [Your Company Name] is searching for an experienced underwriter. They will be responsible for meeting the minimum daily production goals while clearing conditions and performing within department audit standards. Our ideal candidate will have expert knowledge in risk assessment, meticulous attention to detail, good negotiating skills, and proven work experience in a fast-paced environment with tight deadlines.
Typical duties and responsibilities
- Review, analyze, and verify loan applications and supporting documentation
- Analyze loan risk and request additional information to determine coverage needs
- Define the terms and conditions of the insurance coverage and premium
- Review loan documentation and vendor reports while identifying possible fraudulent activity
- Approve, request a modification to, or reject loan applications based on findings
- Follow up with loan officers and management on potential clients
- Reassess risk when policies come up for renewal
- Help agents determine premium costs
- Evaluate insurance claims for accuracy and the coverage amount
- Prepare reports that detail risk assessment findings that contribute to the final decision
Education and experience
- Bachelor’s degree in finance, business, economics, mathematics, or a related field
- 3-5 years of underwriting or credit and risk analysis experience
Required skills and qualifications
- Good analytical skills
- Reasonable and sound judgment
- Excellent problem-solving and decision-making skills
- Working knowledge of databases and tracking systems
- Solid organizational skills
- Proven ability to work under pressure and meet strict deadlines
- Strong interpersonal and negotiation skills
- In-depth knowledge of underwriting regulations
- Experience working in customer service
- Experience training new hires
- Excellent math skills
- Knowledge of Microsoft Office, spreadsheets, and other software programs
- Experience analyzing financial documents
Typical work environment
Underwriters typically work in an office setting in a bank, insurance agency, or other financial institution. They spend most of their time working alone on applications on a computer. Some underwriters might have to travel to assess properties and meet with other financial professionals or clients to discuss policies.
Underwriters generally work a regular 40-hour week from Monday through Friday between the hours of 9 AM and 5 PM. Occasional overtime may be required to meet critical deadlines.
Underwriters work in a variety of industries and usually specialize in mortgage loans or insurance plans. Many institutions offer certifications for underwriters, including:
- Certified Residential Underwriter (CRU) – The CRU is the standard for excellence in mortgage loan underwriting and is designed for underwriting professionals with at least 1 year of experience looking to elevate their skills. This training helps individuals develop specific skills that contribute to reduced error rates, increased productivity, quicker decisions, and improved quality. Candidates will gain insight into current influencing factors, regulations, and industry issues.
- Certified Mortgage Underwriter (CMU) – The CMU program is offered by the National Association of Mortgage Underwriters (NAMU), and is an ideal certificate for entry-level residential mortgage underwriters. The certification course includes underwriting essentials, real-world lessons, FHA/VA underwriting, and manual underwriting. Certification is issued after passing the exam and must be renewed yearly.
- Chartered Property Casualty Underwriter (CPCU) – The CPCU professional designation is the premier certification in property-casualty insurance. This course is recommended for claim adjusters, underwriters, risk managers, brokers, agents, regulators, consultants, and other financial professionals. Candidates will learn about risk management fundamentals, emphasizing managing risk data, modeling outcomes, and applying new risk technologies that prepare them to confidently meet the challenges of the risk management and insurance marketplace.
The path toward becoming an underwriter begins with obtaining a bachelor’s degree in business, economics, finance, or business. Graduates can gain experience in entry-level customer service, banking, insurance, or other business roles. From there, candidates can move into a position as an underwriter where they will typically receive on-the-job training working under an experienced professional. This is where aspiring underwriters will learn best industry practices and company-specific practices. Underwriters generally work their way up from lower-value projects to higher-value policies. With years of experience and additional training, such as becoming certified through the American Institute for Chartered Property Casualty Underwriters, candidates can move into senior underwriter positions.
US, Bureau of Labor Statistics’ job outlook
SOC Code: 13-2053
|Projected Employment in 2030||117,200|
|Projected 2020-2030 Percentage Shift||2% decrease|
|Projected 2020-2030 Numeric Shift||2,200 decrease|
Social media has accounted for exponential growth in the amount of data available to underwriters in recent years, which can appear overwhelming. Through data analytics, data mining, and predictive modeling, underwriters can analyze large volumes of data to make better decisions and provide more accurate and timely insights into a customer’s risk profile.
Artificial intelligence (AI) is helping underwriters improve policies and increase workflows. AI can help underwriters offer more accurate recommendations to customers for reducing their premiums and addressing outstanding issues by providing real-time underwriting analysis.
Innovation in business models and processes is challenging traditional working practices by underwriters. Machine learning (ML) is replacing time-consuming ‘age and amount’ charts. Video and aerial images and drone imagery are reducing or eliminating the need for underwriters to travel to a site or property. By automating a number of manual tasks and cutting down the time spent in the field, underwriters are able to expedite claims validation and claims estimation reporting.