what is an underwriter?
An underwriter is a type of financial advisor who evaluates risk. As an underwriter, your job is to examine applicants and see how stable their finances are. You use your specialized knowledge to determine whether or not your company is likely to lose money by working with the customer. Your job consists of analyzing applications and then making recommendations for how to handle the application. In addition to denying and approving applications, you also suggest prices to charge the client. You'll do things like state a fee or interest rate that the client must pay to get a loan or insurance policy with your company. Overall, your main goal is to ensure that the amount of money the customer pays outweighs the risk they represent to your company.
where do underwriters work?
This position is very useful to financial companies. Underwriters often work in insurance industries. They determine whether an applicant will apply for a policy and see how much the applicant's premium should be. Another common position for underwriters is in lending industries. Underwriters help banks and mortgage companies figure out what sort of loan a candidate is eligible for. Finally, some underwriters work for securities and investment companies. They consider how much risk is involved in initial public offerings (IPOs) and recommend prices for investments.
Would working as an underwriter suit your logical and mathematical skills? Then read on to find out what competencies and qualifications you need to thrive in an underwriter role.
underwriter jobs near youaverage underwriter salary
Being an underwriter is typically a job that pays above-average wages. The U.S. Bureau of Labor Statistics (BLS) reports that underwriters make between $47,000 and $126,000 per year. On average, they earn $76,390 each year and get paid $36 per hour. Underwriters usually work a full-time job and get paid an annual salaried wage instead of an hourly wage.
factors that affect your salary
The main factor that affects your salary is your location. Underwriters in areas with a high cost of living typically make more. People who work with financial institutions and loan providers make slightly more than underwriters who work in insurance. Your employer also impacts your wages because larger and more prestigious institutions often pay larger salaries. The final factor to consider is your responsibilities. Some underwriters work very independently and create entire contracts for customers to sign. Others only prepare recommendations and have to get a supervisor to approve all suggested contracts. Those who have more responsibility tend to make higher salaries.
Would you like to know what an underwriter earns? Where the highest salaries are paid for an underwriter? Then check out this underwriter salary page and find out all about the salary of an underwriter in the USA.
types of underwriter
There's quite a bit of overlap between types of underwriters, but most people categorize underwriters based on where they work. Common types of underwriters include:
- insurance underwriter: This is the most common type of underwriter. They recommend insurance policy premiums based on candidates' health, lifestyle, location, or driving record.
- mortgage underwriter: These underwriters assess the right interest rate for mortgage applicants. They consider both the applicant's finances and the value of the desired home.
- securities underwriter: Securities underwriters create pricing options for IPOs. They figure out how much new stocks should sell for. If they price it too high, their investment bank may be liable to pay the difference.
working as an underwriter
If you're considering this job, it's helpful to learn what it's like to be an underwriter. Discover what your work environment is like, who your coworkers are, and more.
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underwriter job description
What does an underwriter do at work every day? Though it might seem like you spend a lot of your time sitting around doing paperwork, your job has a lot of variety. Throughout the day, you'll often find yourself doing one or more of these tasks:
- talking to customers: You'll need to learn a lot about the customers you're underwriting, so you have to spend some time talking to them. Underwriters often need to request specific paperwork or call clients to ask for clarification.
- review and confirm applications: When customers submit applications, it's your job to review them. You have to verify all the information and make sure customers entered the right details.
- identify potential fraud: You have to look out for warning signs of fraud. If you can't verify an applicant's truthfulness, you'll flag their claim for more investigation.
- assess signs of risk: One of the most important parts of your job is analyzing risk. You look at things like how much money a client makes and what credit score they have. Then you use these details to see how likely it is that your company will have to pay an insurance claim or foreclose on a house.
- make eligibility and pricing decisions: After assessing risk, you then consider how much the customer would have to pay your company to offset the potential risk. Low-risk customers pay less, high-risk customers pay more, and extremely high-risk customers are often declined.
- draft policies and documents: All of your recommendations then get turned into official loan offers or insurance policies. If your supervisor approves, the client then gets an official contract.
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underwriter work environment
Being an underwriter is an office job. You perform all of your tasks indoors and do not need to travel. Recently, there have been an increasingly large number of remote job opportunities for underwriters. In these cases, you still work in an office, but it's your home office instead of a corporate office. Whether you work remotely or not, you'll spend much of your time sitting at a desk with your computer. Modern underwriting is typically done with software, but there may be a little physical paperwork to do as well. In cases with hard documents, you'll end up leaving your desk occasionally to file paperwork.
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who are your colleagues?
Your main colleagues will be other underwriters. Most companies that hire underwriters have an entire team of underwriters working together to handle their customers. Depending on the industry you work in, your colleagues might include loan processors and actuaries. You may also work in close proximity with customer service representatives, administrative assistants, and other support staff. Some jobs also have you working with specialists like mortgage brokers and financial analysts.
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work schedule
Being an underwriter is almost always a full-time job. People usually work around 40 hours per week. Overtime is rare in this industry. You'll typically find yourself working weekdays between around 9 a.m. and 5 p.m. with a lunch break of around 30 to 60 minutes. Some companies may offer chances at more flexible scheduling. If you work in insurance, you could potentially ask to work on nights or weekends. This is usually a salaried position, so you do not clock in and out each day. Instead, you go to work regularly and stay until you finish your work for the day. Some companies with remote workers allow their employees to set their own schedules entirely.
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job outlook for underwriter
BLS data shows that the underwriting industry is declining. The number of new jobs should decrease by 4% by 2031. However, even though there isn't a lot of growth, there would still be some job opportunities opening as older underwriters leave. An estimated 8,400 new jobs will open each year.
This decline is primarily due to the rise in automated underwriting which uses computer programs to evaluate risk automatically. However, automated underwriting only works for simple cases where customers fill out forms clearly. More complex cases or situations where customers have a lot of paper documents still require human input. Therefore, underwriters who specialize in customer interviews, complex underwriting, and fraud detection will have more opportunities. You can make yourself stand out by focusing on the parts of underwriting that a computer is unable to do.
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benefits of working for randstad as underwriter
Working through Randstad offers you a range of benefits:
- being paid weekly
- flexibility
- always a contact person you can fall back on and ask for help from
- many training opportunities
- a range of jobs in your area
Want a permanent contract? But you wonder why it would be interesting for you to work with a staffing company? A temporary job as underwriter is often a stepping stone to an attractive permanent job. Every year, thousands of people earn a permanent contract with great employers thanks to a temporary job found through Randstad. What's more, many companies recruit their permanent employees through Randstad too!
underwriter skills and education
Being an underwriter is a skilled position that you need some training to perform. Before you can find a job, you need to make sure you have these requirements:
- education: The primary requirement for any underwriter is a bachelor's degree in a relevant field. Employers will usually accept any degree that shows you have financial or mathematical skills. Some popular degrees include accounting, mathematics, or economics. Though very rare, some companies may hire underwriters with just an associate's degree as long as they meet other qualifications.
- certifications: This field encourages job candidates to get certifications. Life Underwriter Training Council Fellow (LUTCF) and Chartered Life Underwriter (CLU) certifications are especially popular.
- experience: Underwriters usually need around a year of training before they can work independently. It's easier to get hired as an underwriter if you have one to two years of experience as an associate underwriter or underwriting assistant.
- ongoing training: Underwriter policies are always changing as government regulations change. If you've been an underwriter for a while, you could need to get updated training before applying for new jobs.
skills and competencies
Successful underwriters tend to excel in these areas:
- attention to detail: Underwriters need to pay attention to small facts and bits of data. Even when your work is repetitive, you should be able to notice essential details.
- mathematics: You'll spend a lot of time calculating things like loss probability and the total amount of debt, so you need to be comfortable with math. Computer programs will handle most details, but it's still important to understand how statistics and probability work.
- technology: You do most of your work with software, so computer skills are a must. Most modern underwriters also need to be able to send and receive documents via email and cloud-sharing programs.
- communication: Since you discuss matters with clients and colleagues, it's helpful to have interpersonal skills. Good underwriters can express ideas clearly while sounding polite and professional.
- decision-making: In upper-level jobs, you make decisions that can cost your company thousands of dollars. You need to be level-headed and confident in your own choices.
FAQs about working as an underwriter
Here you will find answers to the most frequently asked questions about underwriters.
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do you need a license to be an underwriter?
Unlike some types of brokers or insurance agents, underwriters do not need a license. There are no federal or state licensing requirements. However, some jobs will require you to get certified before getting a job. Unlike the licensing process, the certification process is often shorter and requires fewer fees and legal paperwork.
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what types of software do underwriters use?
Most underwriters use standard office software like Excel, Word, and Outlook. They also use a variety of accounting and underwriting software. Some big companies have their own proprietary software, while smaller companies encourage you to use third-party software. Popular options include Applied Rater, PL Rating, and Duck Creek Rating.
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what's the difference between an underwriter and a broker?
A broker works on behalf of individual customers to help them find the right mortgage or insurance policy for their needs. Meanwhile, underwriters work on behalf of the mortgage or insurance company. They are the ones actually creating the policies that brokers present to their clients.
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how long does underwriting take?
Each client usually takes between two to three days of work to process. However, if your customer is particularly complex, it can take up to six weeks to finalize their case.
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can underwriters deny loans and policy applications?
In most cases, you are the one directly approving or denying customers. The only exception would be if you're an entry-level underwriter working under someone else's supervision. Furthermore, most institutions will have an appeals process, so you can redirect clients to another department if they complain about a denial.
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how do I find a job as an underwriter?
Applying for an underwriter job is easy create a Randstad profile and search our underwriter jobs for vacancies in your area. Then simply send us your CV. If you do not have a resume, no worries. Just check out our resume builder. This state of the art tool will help you to create your own resume. Need help with your application? Check out all our job-hunting tips!
