Commercial Underwriter: Salary and Career Facts

Research what it takes to become a commercial underwriter. Learn about job duties, education requirements, salary and job outlook to find out if this is the career for you. Schools offering Finance degrees can also be found in these popular choices.

What Is a Commercial Underwriter?

Commercial insurance underwriters help determine whether a business is insurable against financial loss. Their duties may include screening applicants, analyzing recommendations produced by software, determining the risk involved in insuring the applicant and deciding whether to offer insurance. They also set appropriate premiums and coverage and may contact field representatives to gather more information. The table below outlines the general requirements for a career as a commercial underwriter.

Degree Required Bachelor's degree
Training Required On-the-job training is offered through most companies
Certification Professional certification may be expected by employers; certification may also be necessary for advancement to senior positions
Job Growth (2014-2024) -11% for all insurance underwriters*
Mean Annual Salary (2015) $72,650 for all insurance underwriters*

Source: *U.S. Bureau of Labor Statistics

What Will I Do as a Commercial Underwriter?

Commercial underwriters are typically employed by insurance companies. According to the U.S. Bureau of Labor Statistics (BLS), as a commercial underwriter, you will use specialized software to evaluate the potential risks of insuring a prospective business (www.bls.gov). You will also calculate the premium and write the policies for coverage. As an underwriter, you must be careful in making your determinations, as charging too low a premium or approving a bad risk may result in claims paid out that are financially damaging to the insurer. If the premiums are too high, your company may lose business to competitors.

There are usually four primary lines of insurance: life, property and casualty, health and mortgage. As a commercial underwriter, you usually will specialize in property/casualty insurance and may have a sub-specialty, such fire or marine, adds the BLS.

Commercial underwriters need to do a thorough evaluation of a business's entire structure and operations to analyze and calculate risks and premiums. According to O*NET OnLine, the investigation may also include examination of a company's finances, its number of business transactions and the physical condition of the premises (www.onetonline.org).

How Can I Qualify for this Work?

Most insurance companies prefer to hire those with a bachelor's degree in finance or business or those who have a strong background in insurance, according to the BLS. Much of an underwriter's job is now done using computers, so having good computer skills is very important. Companies often have their own training programs, as most underwriting is learned on the job, so you can probably expect to begin your career as a trainee.

You will also need to have good oral and written communication skills, possess good judgment and be attentive to detail. O*NET OnLine adds that being dependable, having initiative, setting and achieving goals and having a high stress tolerance are good qualities that will help you to advance in this challenging career.

As you begin your insurance career, the BLS reports that you can earn a designation such as the Associate in Commercial Underwriting (ACU), offered by the Insurance Institute of America. To earn the designation, you must complete a series of courses that take 1-2 years to complete. Later, you may want to earn the Chartered Property and Casualty Underwriters (CPCU) certification, available through the American Institute for Chartered Property and Casualty Underwriters (AICPCU). This designation is available to those who have at least three years of experience, pass a series of eight exams and follow the Institute's ethical guidelines (www.aicpcu.org). To advance in your career, you will likely need to complete continuing education to stay current with the latest changes in insurance regulations as they affect your company's policies and customers' coverage.

What Kind of Income Can I Earn?

The BLS states that as of May 2015, the mean hourly wage for insurance underwriters was $34.93; the mean annual wage was $72,650. According to the BLS, an estimated 11% decline in job growth is projected, due largely to automation of many duties once performed by underwriters. However, in order to try to recapture profitability, some companies are putting more emphasis on better underwriting, which may lead to more opportunities for experienced underwriters.

What Are Some Related Alternative Careers?

Those interested in commercial insurance underwriting may also want to consider some related careers which require a similar level of education. For example, actuaries use mathematics to assess potential risks and their financial costs to businesses in order to minimize financial risk. Cost estimators compile and analyze costs associated with constructing a product or building. Loan officers evaluate applicants and decide whether or not to offer loans to individuals or businesses.

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