Insurance Underwriting: What You Need to Know

by Mike on January 9, 2014

Insurance Underwriting: What You Need to Know

Insurance underwriting may seem like a vague and impenetrable process, only understood by those with specific training in this field. However, insurance underwriting is more integral to our professional and personal lives than many of us realise. Corporate liability, health care and car insurance coverage all require the services of an insurance underwriter. This guide seeks to demystify the process of insurance underwriting, so look no further if you want to find out how it works.

What is Insurance Underwriting?

Insurance underwriting is essentially the evaluation of risk. If a client is seeking insurance for any reason, insurance underwriters will determine how risky the client is and how much coverage they should receive. This process also covers the question of how much a client should pay for insurance and whether or not the insurance company should accept the individual risk attached to a client and insure them. The underwriter acts to protect the insurance company from risks that will make a loss or that the company is not able to cover.

The Process

When determining whether or not a company should accept risk, the underwriter should use relevant evidence provided by the client. If you’re looking for health insurance, your medical records will be used as evidence, along with your age and occupation. If you have a health condition, it’s likely that your premium will be set higher because you present a greater risk to the company. In underwriting for car insurance coverage, the underwriter will need to see your driving record. For those with a number of speeding offences or who fall into a certain age bracket, the premium will be more expensive.

Insurance Underwriting Firms

Insurance Underwriting: What You Need to KnowIt’s usually brokers and agents who deal with customer service issues and manage accounts. If you’re applying for insurance, it’s unlikely that you will have any contact with an insurance underwriter. However, if you choose a firm that specialises in insurance underwriting, this will not be the case. If you wish to deal directly with an insurance underwriting company, it’s advisable to look for a firm that is willing to find creative solutions to risk and will build long lasting relationships with its clients. Underwriters who deny applications too quickly are often more concerned about making money for insurance brokers than finding the best solution for clients.

Insurance is an investment as well as a factor to your financial future.  Finding the right Insurance Underwriting Firms is important.  Here are some additional tips to help you out:

  • Insurance-related experience is a must.  It would also be advantageous to find firms who empoy peopel with coursework in accounting, business and law.
  • Computer-related skills are important in doing underwriting tasks.  Programs used by professionals in this work are updated regularly so you must ahve someone who can easily adapt to the changes.
  • Certifications and additional designations are a great way to prove the level of experience the firm has as well as the expertise they have in Underwriting.

To find out more about insurance underwriting or to engage the services of a highly qualified underwriter, get in touch with a specialist company like Caitlin USA.



***Photo thanks to David Hilowitz and Flikr***

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