Monday 15 January 2007

UNDERWRITING (INSURANCE)

UNDER WRITING'S FOUR BASIC FUNCTIONS
FURTHER READING:

In the insurance industry, the practice of underwriting refers to the process of accepting or rejecting risks. It is the very heart of insurance and is the first step taken by an insurance company to generate premiums. Originally, insurance and underwriting were synonymous. That is, underwriting referred to the operation of the insurance business. As the insurance industry developed, underwriting took on a more specialized meaning.

In the early days insurance was more personal than it is today. A contract was drawn up between a property owner and a second party, who was willing to insure the specified property, or between the insured and the insurer. The contract specified the terms under which the property would be insured. The property owner placed his name at the top of the contract, stating that he was the owner of the property and beneficiary of the contract if the property was subsequently damaged. The other party, who guaranteed the contract and was the insurer, signed his name below, at the bottom of the contract. Literally, he "underwrote" the contract.

An underwriter is the person who decides whether or not to insure risks for which applications have been submitted. The underwriter's task is to evaluate a risk, estimate the potential exposure, determine the likelihood of loss, then make a decision whether or not to accept the application for insurance.

The term "underwriter" developed in the early days of marine insurance. It was common practice for individuals seeking insurance for a ship and its cargo to meet with those desiring to write such insurance in coffeehouses. A person seeking insurance for his ship and its cargo would bring a paper describing the ship, its contents, crew, and destination to the coffeehouse. The paper would circulate, with each individual who wished to assume some of the obligation signing his name at the bottom and indicating how much exposure he was willing to assume. An agreed-upon rate and terms were also included in the paper. Since these people signed their named under the description of the risk, they became known as underwriters.

As insurers changed from individual to companies, signatures on insurance contracts became those of company officers. The term underwriter continued to be used in a more restrictive sense; it applied only to the person who performed the process of selecting risks and determining the terms of insurance. Risk selection and determination of policy terms continue to be the basic duties of underwriters today.

Underwriters work for insurance companies. In addition to on-the-job training, they may earn an Associate in Underwriting designation from the Insurance Institute of America. In the life insurance segment, underwriters may enter a program of study that leads to the designation of Chartered Life Underwriter (CLU). Most CLU's are engaged in some aspect of insurance sales as well. In the property and casualty insurance segment, underwriters may work toward the designation of Chartered Property Casualty Underwriter (CPCU).

UNDER WRITING'S FOUR BASIC
FUNCTIONS

The process of underwriting involves four basic functions: 1) selection of risks, 2) classification and rating, 3) policy forms, and 4) retention and reinsurance. By performing these four functions the underwriter increases the possibility of securing a safe and profitable distribution of risks.

RISK SELECTION.

In this step the underwriter decides whether or not to accept a particular risk. It involves securing factual information from the applicant, evaluating that information, and deciding on a course of action. The underwriter is typically aided by a list of acceptable and prohibited risks.

CLASSIFICATION AND RATING.

Once the risk has been accepted, the underwriter then classifies and rates the policy. Several tentative classifications are usually assigned before a final decision on classifying the risk is reached. The purpose of using classifications is to separate risks into homogeneous groups to which rates can be assigned. Insurers may have their own classification and rating system, or they may obtain a system from a rating bureau.

POLICY FORMS.

After determining the acceptability of an applicant and assigning the proper classification and rating, the underwriter is ready to issue an insurance policy. The underwriter must be familiar with the different types of policies available as well as be able to modify the form to fit the needs of the applicant.

The first three underwriting functions—risk selection, classification and rating, and policy selection—are interdependent. That is, the underwriter determines that a certain risk is acceptable when specified rates and forms are used. The underwriter also performs a fourth separate function on every risk before the underwriting is complete: reinsurance.

RETENTION AND REINSURANCE.

Reinsurance involves protecting the insurance company against a certain portion of potential losses. Every risk presents the possibility of loss that will equal or exceed the policy limits. It is up to the underwriter to protect his or her company from undue financial strain. The underwriter does this by retaining only a certain portion of the risk and securing reinsurance for the remainder of the risk.

[David P. Bianco]

Friday 12 January 2007

Ensure A Rewarding Career In Insurance

Insurance careers may be the best kept employment secret in the world of finance. The insurance industry relies heavily on the work of financial professionals.

By Robert Elsenpeter, Star Tribune Sales and Marketing

The thought of insurance industry careers may just conjure images of an agent or someone mailing out the yearly calendars. But it may be that very stereotype that keeps people away from the insurance industry.

The fact of the matter is that there are great jobs in insurance, especially for those with finance and accounting backgrounds. In fact, insurance careers may be the best kept employment secret in the world of finance. The insurance industry relies heavily on the work of financial professionals.

On its website, the Insurance Information Institute (III)(www.iii.org) writes, "Insurance companies act as financial intermediaries in that they invest the premiums they collect for providing this service."The U.S. Bureau of Labor Statistics (BLS) notes that insurance carriers and other financial institutions, such as banks and securities firms, are able to sell one another's products. As a result, more insurance carriers now sell financial products such as securities, mutual funds and retirement plans.

What does this mean for finance professionals? The insurance industry needs them.

Need

"We really are challenged to attract financial talent," says Jim Kwapick, regional vice president for Robert Half International and Accountemps. "It's very challenging."

Kwapick attributes the increased need to a strong employment market and an increased demand for finance professionals.

As insurance companies evolve, they are adding financial services to their offerings, resulting in more jobs, says Carolyn Gorman, vice president of the III.

"There's also been a wave of retirements and more to come," adds Gorman. "Insurance companies are looking to replace those who are retiring."

In fact, within the insurance industry, the BLS forecasts a 14 percent increase in accountants and auditors by 2014. Financial analyst positions are expected to rise by 12.6 percent.

For recent graduates, the insurance industry can be an excellent place to start.

"This field provides the basis for understanding business," says Kwapick. "A lot of people start as an accountant or in finance and move to CFO, and then COO or CEO."

Opportunities

There are all sorts of careers in the insurance industry, from agents to investigators to accountants. "Almost anyone with a good education will find a good place in the insurance industry," says Gorman.

While working behind the scenes might seem the norm at an insurer, those with finance backgrounds might be interested in bringing their talents to agent work.

Agents' careers are being somewhat threatened by the prevalence of computer technology, which allows customers to buy directly from a company and forgo a visit to an agent. But agents are not dispensable; they are especially necessary to help with intricate policies.

"Some policies are extremely complex," says Gorman. "There's no way you can provide the amount of knowledge for a complicated policy online."

So why is the insurance industry such a dark horse when it comes to the perception of employment opportunities?

"I don't know if there's the sex appeal with the insurance industry," says Kwapick.

Source: http://www.startribune.com/1759/story/819300.html

How To Start a Career in Insurance

By Tonya Sandersfeld

Sunday, November 12, 2006

Starting a career in the insurance field can be very rewarding! There are so many different positions available in insurance that it's possible to find one to suit everyone. If you are a people person, you can become a sales agent. If you are not a people person, you can work behind the scenes to process claims. If you are good with computers, you can work as an adjuster or provide clerical support. If not, you can field clients' questions at a call center. However, the most successful candidates in the insurance field are good with numbers, from actuaries to investigators to managers. In addition, the U.S. government has recently passed a law which allows all financial institutions to sell all financial products. In other words, insurance agencies can sell mutual funds, banks can sell retirement plans, and financial analysts can sell insurance. So, having an above-average talent for math is now even more important!

Obtain a proper education. The first step in becoming an insurance professional is to become educated in the insurance field. Some colleges offer a bachelor's degree in insurance, but more often, insurance agents will obtain a degree in a related field, such as economics, finance, accounting, marketing or mathematics. Getting a college degree is not a requirement for starting an insurance career, but it can give your career a big jump-start. However, if you are good in math, are a born salesperson, and have at least a high-school diploma, you can still become an insurance professional.
Become licensed. It is necessary to become licensed in insurance for the state in which you intend to work. Depending upon the state, licensure may consist of completing a series of classes satisfactorily, attending a short licensure program, or studying for and taking the licensure exam on your own. To determine the exact requirements for the state in which you live or intend to work, consult your state government's website. No matter which state you live in, you will need to become licensed for each type of insurance that you intend to sell - property/casualty and life/health are the two most common areas of licensure.
Fulfill continuing education requirements. Even after you have become licensed to sell insurance, you will need to continue taking classes to meet the continuing education requirements for your state. The insurance field changes quickly, so it's vital to keep up with changing laws and codes.
Determine if you would like to join an agency or work independently. Most insurance agents work either for an insurance agency which employs anywhere from two to one hundred agents; or they start their own business. The advantages to owning your own business are obvious - you are your own boss, and you can set your own policies and procedures, as well as your own hours in many cases. However, you will be getting paid solely by commission, which can be difficult when you're building a business. Typically, an insurance agent gets a commission of between three percent and ten percent annually on each policy that he sells. If you have only a few clients in the beginning, it can be difficult to sustain your business. Insurance agencies will usually pay their agents a salary in addition to their commissions.
Find a job! Once you've become licensed to sell insurance and decided which insurance career path to pursue, it's a simple matter to find available jobs. All of the usual websites, such as Monster and CareerBuilder, can steer you toward open insurance positions. You can also try looking in the classifieds. Another useful method for job-hunting in the insurance field is to go to the website of an insurance carrier, such as American Family, State Farm or Allstate. They will have a link to a career opportunities page, which can provide you with many job possibilities, from entry level all the way up to managerial positions.

If you invest just a little bit of time in your insurance education, you're sure to find yourself on a rewarding, exciting career path. And if by chance, the insurance field isn't for you, it can be a great starting place for a variety of other finance-related fields!

Source: http://www.howtodothings.com/careers/a4007-how-to-start-a-career-in-insurance.html

Careers in Insurance: Underwriting

Underwriting

Underwriters assess risks and decide whether to accept applications for insurance cover - and on what terms. This is a core skill because it is the essence of insurance - carried out well, it will minimise losses for a company and help it to make a profit. Consequently, underwriting capability has massive influence on the competitiveness of insurance companies.

Underwriters, who often specialise in one type of insurance, determine policy terms and conditions, and calculate premiums based on risk assessment, statistical and background information - looking at the potential for a loss based on their experience of a particular trade or industry.

Entry requirements

This area of work is open to all graduates, with preference given to degrees in subjects like business/management, economics, law and mathematics, or in relevant science or engineering disciplines. Some larger insurance companies include underwriting as part of general graduate management training schemes.

What you might do

Underwriting work is largely about relationship building and it demands close attention to detail. You are likely to be involved in networking to get things done, gathering and assessing information, studying proposals and, for any given scenario, calculating possible risk, weighing up the likelihood of a claim being made and in what timeframe.

Underwriters compute results to determine the cost of insurance and decide whether the risk is viable. You might also find yourself liaising with specialists, negotiating terms with policyholders or brokers, specifying conditions for certain types of cover, and drawing up policies and contracts.

Training and professional qualifications

Graduate training schemes for underwriters typically last for around two years and are often followed by another two or three years' training in a specialist area of risk.

Most training tends to be on the job, working alongside experienced colleagues and learning about different departments and about accounting, claims and investment functions. Some employers may ask you to complete Chartered Insurance Institute (CII) professional examinations as part of your training. Accomplished through distance learning, evening classes or day release, reaching CII associateship level usually takes 2-3 years.

Professional underwriters (not to be confused with underwriter members) working at Lloyd's insurance market must pass Lloyds' own tests. Study for this is provided by in-house and external courses through the CII.

Rewards

The typical salary for a new graduate entrant varies from £16,000 - £20,000, increasing with substantial experience to £40,000 - £100,000.

Professional underwriters at Lloyd's of London, who are different from 'underwriter members', can earn over £300,000.

Prospects

Movement into other core areas of insurance - for example risk management, claims or broking - is quite common for experienced underwriters, whose broad experience also gives them scope for general management roles.

Alternatively, you could choose to move into reinsurance to deal with very complex cases and high levels of risk, or progress into a specialist field, such as marine or aviation insurance. If you speak one or more foreign languages, there are also possibilities to work abroad.

Source: http://www.insurancecareers.cii.co.uk/2.5.underwriting.html

Useful links

Chartered Insurance Institute (CII)
42-48 High Road, South Woodford, London E18 2JP
Tel: 020 8989 8464
www.cii.co.uk/

Financial Services Authority (FSA)
25 The North Colonnade, Canary Wharf, London E14 5HS
Tel: 020 7066 1000
www.fsa.gov.uk

The International Underwriting Association of London (IUA)
London Underwriting Centre, 3 Minster Court, Mincing Lane, London EC3R 7DD
Tel: 020 7617 4444
www.iua.co.uk/

Lloyd's of London
One Lime Street, London EC3M 7HA
Tel: 020 7327 1000
www.lloyds.com

Insurance Underwriter: Career, Job, and Training Information

Insurance Underwriter Career and Job Highlights

The need for underwriters will always exist as long as insurance is considered a necessity for people and businesses.
College graduates who have a degree in finance or business administration with courses in accounting are more likely to find opportunities for employment with large insurance companies. However, a bachelor's degree in any field along with courses in accounting and business law may be adequate in order to meet qualification requirements.

Insurance Underwriter Career and Job Description

By assuming billions of dollars in risks each year, insurance companies protect individuals and organizations from significant financial loss. Underwriters are needed to identify and calculate a policyholder's risk of loss. They also work to establish appropriate premium rates, and to write policies that cover these risks. Great trust is placed in underwriters as an insurance company may have to pay excessive claims if the underwriter is too liberal, or may loose customers to competitors if the underwriter is too stingy.

Aided by computers, underwriters analyze information in insurance applications in order to determine if a risk will not result in a loss and is therefore acceptable. Applications are often supplemented with reports from, medical reports, loss-control consultants, actuarial studies, and data vendors. After an adequate amount of information has been reviewed the underwriter must then decide whether to issue the policy and what appropriate premium to charge. Underwriters serve as the main link between the insurance carrier and the insurance agent in making this determination. On occasion, they may also accompany sales agents to make presentations to prospective clients.

Technology is very important to an underwriter's job. Computer applications called "smart systems" are used by underwriters to efficiently and accurately manage risks. These systems automatically analyze and rate insurance applications, recommend acceptance or denial of the risk, and adjust the premium rate in accordance with the risk. With the help of these systems, underwriters are better equipped to make sound decisions and avoid excessive losses.

The work of underwriters has also been greatly affected by the Internet. The computer systems of many insurance carriers are now linked to various databases across the Internet allowing immediate access to information. Such information may include driving records which are necessary to determining a prospective client's risk. Easy access to information reduces the amount of time and paperwork it would otherwise take for an underwriter to complete a risk assessment. Most underwriters specialize in one of three major categories of insurance-life, health, or property and casualty. Insurance underwriters specializing in either life or heath may go on to further specialize in group or individual policies.

Underwriters specializing in Property and Casualty usually localize their specialization into either personal or commercial insurance, and then further by the type of risk insured; such as homeowners, automobile, fire, liability, workers' compensation or marine. In some instances casualty companies provide insurance through a single "package" policy which covers a wide range of risk types. In situations such as this the underwriter must be familiar with different lines of insurance. For example, in business insurance cases the underwriter must often be able to evaluate the firm's entire operation when appraising its application for insurance.

Group contacts are making up an increasing proportion of insurance sales, particularly in life and health insurance. A standard group policy insures everyone in a specified group through a single contract at a standard premium rate. It is the responsibility of the group underwriter to analyze the overall composition of the group assuring that the total risk is not excessive. Another type of group policy provides members of a group with individual policies reflecting their needs. Such policies are often given to labor unions. Often these are casualty policies, like those covering vehicles. In this case, the casualty underwriter evaluates the application of each group member and makes individual appraisals. Some group underwriters may also meet with union or employer representatives in order to discuss the types of policies that are available to their particular group.

Insurance Underwriter Training and Job Qualifications

Most large companies prefer to hire college graduates who have a degree in finance or business administration even for entry- level underwriting positions. However, a bachelor's degree in almost any field along with courses in accounting and business law provides a good general background and may be sufficient to meet qualification requirements. Because computers are an essential part of most underwriters' jobs, computer skills are crucial.

Once hired, new employees usually start out as underwriter trainees or assistant underwriters. Under the supervision of an experienced risk analyst they may help collect information on applicants and evaluate routine applications. Trainees working in property and casualty areas study claims files in order to become more familiar with various aspects associated with specific types of losses. New employees hired by many larger insurers may be offered a work-study program. Work-study programs can last anywhere from a few months to a whole year. As time goes on and more experience is gained, trainees are given more and more responsibilities and are assigned policy applications that are more complex and cover greater risks. Computers are used for more efficient analysis and processing of more complex applications.

For people who enjoy analyzing information and paying close attention to detail, underwriting can be a satisfying career. It is important for underwriters to demonstrate good judgment in order to make reliable and sound decisions. Because much of the underwriter's work involves dealing with agents and other insurance professionals, excellent communication and interpersonal skills are also essential. Underwriters hoping for advancement must remember that continuing education is vital. Often insurance companies will pay tuition for underwriting courses successfully completed by their trainees. Some may even offer salary incentives. Many independent study courses for more experienced property and casualty underwriters are also available. For those interested in developing a career in underwriting personal insurance policies may complete the requirements necessary to earn an Associate in Personal Insurance designation. To do this underwriters are required to complete a series of courses and examination which generally last from 1 to 2 years.

Underwriters who achieve the third and final stage of an underwriter may be awarded the designation Chartered Property and Casualty Underwriter, which is given out by the American Institute for Chartered Property Casualty Underwriters. Earning a more designation takes about four years, and requires passing eight examinations. The examinations cover a wide range of topics including insurance operations and regulations, risk management, financial management, business and insurance law, and financial institutions; and there are three additional course concentrations in either personal or commercial insurance coverage. Although mainly for underwriters such programs and designations are also meant for everyone working in all aspects of property and casualty insurance. For example, the American College offers the Chartered Life Underwriter (CLU) designation and the Registered Health Underwriter (RHU) designation for all life and health insurance professionals.

Experienced underwriters who complete courses of study may advance to senior underwriter or underwriting manager positions. From there some underwriting managers are promoted to senior managerial jobs. A master's degree may be required by some employers in order to achieve this level. Other underwriters, attracted to the earnings potential of sales, obtain State licenses to sell insurance and related financial products as agents or brokers.

Insurance Underwriter Job and Employment Opportunities

Through the year 2012 employment opportunities for underwriters are expected to grow about as fast as the average for all occupations. Although workers will continue to become more productive with additional advances in underwriting software, computer software does not do away with the need for human skills. Because of this underwriter employment will continue to increase as the insurance needs of businesses and individuals rise due to continual population growth. Additional job openings will be brought on by the need to replace underwriters who either transfer to another occupation or who retire from the workforce.

Insurance carriers are constantly changing and updating assessing new risks and offering policies to meet a world of ever changing circumstances. Underwriters are of particular importance in the area of product development. Here underwriters assess risks and set the premiums for new lines of insurance. Long term care insurance is one such new line of insurance being offered by life insurance carriers that may provide new job opportunities.

Demand for underwriters is also expected to improve as insurance carriers try to restore profitability in an attempt to make up for an unusually large number of underwriting losses in recent years. As the carriers' returns on their investments have declined, insurers are placing more emphasis on underwriting to generate revenues. It is expected that this renewed interest in underwriting will result in favorable job opportunities for underwriters in the near future.

Historically employment rates for underwriters has remained relatively steady. Overall, persons with excellent communication and computer skills along with a strong background in finance will have the best opportunities for employment. This profession is less subject to recession and layoffs than other fields because insurance is considered to be a necessity for individuals and businesses both in good times and in times of crisis. Therefore it is expected that the need for underwriters will remain constant throughout time.

http://www.careeroverview.com/insurance-underwriter-careers.html

Insurance Underwriters

Significant Points

Most large insurance companies prefer college graduates who have a degree in business administration or finance with courses in accounting; however, a bachelor's degree in any field—plus courses in business law and accounting—may be sufficient to qualify.
Continuing education is necessary for advancement.
Employment is expected to grow more slowly than average as the continuing spread of underwriting software increases worker productivity.
Job opportunities should be best for those with a background in finance and strong computer and communication skills.

Nature of the Work

Insurance companies protect individuals and organizations from financial loss by assuming billions of dollars in risk each year. Underwriters are needed to identify and calculate the risk of loss from policyholders, establish appropriate premium rates, and write policies that cover this risk. An insurance company may lose business to competitors if the underwriter appraises risks too conservatively, or it may have to pay excessive claims if the underwriting actions are too liberal.

With the aid of computers, underwriters analyze information in insurance applications to determine whether a risk is acceptable and will not result in a loss. Applications often are supplemented with reports from loss-control consultants, medical reports, reports from data vendors, and actuarial studies. Underwriters then must decide whether to issue the policy and, if so, the appropriate premium to charge. In making this determination, underwriters serve as the main link between the insurance carrier and the insurance agent. On occasion, they accompany sales agents to make presentations to prospective clients.

Technology plays an important role in an underwriter's job. Underwriters use computer applications called "smart systems" to manage risks more efficiently and accurately. These systems automatically analyze and rate insurance applications, recommend acceptance or denial of the risk, and adjust the premium rate in accordance with the risk. With these systems, underwriters are better equipped to make sound decisions and avoid excessive losses.

The Internet also has affected the work of underwriters. Many insurance carriers' computer systems are now linked to different databases on the Internet that allow immediate access to information—such as driving records—necessary in determining a potential client's risk. This kind of access reduces the amount of time and paperwork necessary for an underwriter to complete a risk assessment.

Most underwriters specialize in one of three major categories of insurance: life, health, and property and casualty. Life and health insurance underwriters may further specialize in group or individual policies.

Property and casualty underwriters usually specialize in either commercial or personal insurance and then by type of risk insured, as in fire, homeowners', automobile, marine, or liability insurance, or workers' compensation. In cases where casualty companies provide insurance through a single "package" policy covering various types of risks, the underwriter must be familiar with different lines of insurance. For business insurance, the underwriter often must be able to evaluate the firm's entire operation in appraising its application for insurance.

An increasing proportion of insurance sales, particularly in life and health insurance, is being made through group contracts. A standard group policy insures everyone in a specified group through a single contract at a standard premium rate. The group underwriter analyzes the overall composition of the group to ensure that the total risk is not excessive. Another type of group policy provides members of a group—a labor union, for example—with individual policies reflecting their needs. These usually are casualty policies, such as those covering automobiles. The casualty underwriter analyzes the application of each group member and makes individual appraisals. Some group underwriters meet with union or employer representatives to discuss the types of policies available to their group.

Working Conditions

Underwriters have desk jobs that require no unusual physical activity. Their offices usually are comfortable and pleasant. Although underwriters typically work a standard 40-hour week, more are working longer hours due to the downsizing of many insurance companies. Most underwriters are based in a home or regional branch office, but they occasionally attend meetings away from home for several days. Construction and marine underwriters frequently travel to inspect worksites and assess risks.

Training, Other Qualifications, and Advancement

For entry-level underwriting jobs, most large insurance companies prefer college graduates who have a degree in business administration or finance with courses or experience in accounting. However, a bachelor's degree in almost any field—plus courses in business law and accounting—provides a good general background and may be sufficient to qualify an individual. Because computers are an integral part of most underwriters' jobs, computer skills are essential.

New employees usually start as underwriter trainees or assistant underwriters. They may help collect information on applicants and evaluate routine applications under the supervision of an experienced risk analyst. Property and casualty trainees study claims files to become familiar with factors associated with certain types of losses. Many larger insurers offer work-study training programs, lasting from a few months to a year. As trainees gain experience, they are assigned policy applications that are more complex and cover greater risks. Analyzing and processing these applications efficiently requires the use of computers.

Underwriting can be a satisfying career for people who enjoy analyzing information and paying attention to detail. In addition, underwriters must possess good judgment in order to make sound decisions. Excellent communication and interpersonal skills also are essential, as much of the underwriter's work involves dealing with agents and other insurance professionals.

Continuing education is necessary for advancement. Insurance companies usually pay tuition for underwriting courses that their trainees complete; some also offer salary incentives. Independent-study programs for experienced property and casualty underwriters are available as well. The Insurance Institute of America offers both a program called "Introduction to Underwriting" for beginning underwriters, and the specialty designation of Associate in Commercial Underwriting (ACU), a formal step in developing a career in underwriting business insurance policies. Those interested in developing a career underwriting personal insurance policies may earn the Associate in Personal Insurance (API) designation. To earn either the ACU or API designation, underwriters complete a series of courses and examinations that generally last 1 to 2 years.

The American Institute for Chartered Property Casualty Underwriters (AICPCU) awards the Chartered Property and Casualty Underwriter (CPCU) designation, the final stage of development for an underwriter. Earning the CPCU designation requires passing 10 exams, meeting a requirement of at least 3 years of insurance experience, and abiding by the AICPCU's code of professional ethics. Exams cover risk management; insurance operations and regulations, business and insurance law, and financial management and financial institutions. In conjunction with the Insurance Institute of America, the AICPCU offers 22 insurance-related educational programs, including associate designation programs in claims underwriting, risk management, and reinsurance. The American College offers the Chartered Life Underwriter (CLU) designation and the Registered Health Underwriter (RHU) designation for all life and health insurance professionals.

Experienced underwriters who complete courses of study may advance to senior underwriter or underwriting manager positions. Some underwriting managers are promoted to senior managerial jobs. Some employers require a master's degree to achieve this level. Other underwriters are attracted to the earnings potential of sales and, therefore, obtain State licenses to sell insurance and related financial products as agents or brokers.

Employment

Insurance underwriters held about 101,000 jobs in 2004. Approximately 2 out of 3 underwriters work for insurance carriers. Most of the remaining underwriters work in insurance agencies or for organizations that offer insurance services to insurance companies and policyholders. A small number of underwriters work in agencies owned and operated by banks, mortgage companies, and real estate firms.

Most underwriters are based in the insurance company's home office, but some, mainly in the property and casualty area, work out of regional branch offices of the insurance company. These underwriters usually have the authority to underwrite most risks and determine an appropriate rating without consulting the home office.

Job Outlook

Employment of underwriters is expected to grow more slowly than average for all occupations through 2014. Underwriting software will continue to make workers more productive; however, because computer software does not do away with the need for human skills, employment will increase as economic and population growth result in increased insurance needs by businesses and individuals. Job opportunities should be best for those with a background in finance and strong computer and communication skills. In addition to openings arising from some job growth, openings will be created by the need to replace underwriters who transfer to another job or leave the occupation.

Insurance carriers always are assessing new risks and offering policies to meet changing circumstances. Underwriters are needed particularly in the area of product development, where they assess risks and set the premiums for new lines of insurance. One new line of insurance being offered by life insurance carriers that may provide job opportunities for underwriters is long-term care insurance.

Demand for underwriters also is expected to improve as insurance carriers try to restore profitability to make up for an unusually large number of underwriting losses in recent years. As the carriers' returns on their investments have declined, insurers are placing more emphasis on underwriting to generate revenues. This renewed interest in underwriting should result in job opportunities for underwriters.

Because insurance is considered a necessity for people and businesses, there will always be a need for underwriters—a profession that is less subject to recession and layoffs than other fields.

Earnings

Median annual earnings of insurance underwriters were $48,550 in May 2004. The middle 50 percent earned between $37,490 and $65,450 a year. The lowest 10 percent earned less than $30,410, while the highest 10 percent earned more than $86,110. Median annual earnings of underwriters working with insurance carriers were $49,280, while earnings of these in agencies, brokerages, and other insurance related activities were $46,750.

Insurance companies usually provide better-than-average benefits, including retirement plans and employer-financed group life and health insurance.

Related Occupations

Underwriters make decisions on the basis of financial and statistical data. Other workers with the same type of responsibility include accountants and auditors, actuaries, budget analysts, cost estimators, financial analysts and personal financial advisors , financial managers, loan officers, and credit analysts. Other related jobs in the insurance industry include insurance sales agents and claims adjusters, appraisers, examiners, and investigators.

Source: http://stats.bls.gov/oco/print/ocos026.htm

Insurance underwriters have the task of calculating ....

Insurance underwriting derives from the Lloyd's of London insurance market in London, United Kingdom. The basics of underwriting are a process used to assess the process of providing access to insurance. The term 'underwriting' was for financial backers who would accept some of the risk on a venture in exchange for a payment, or premium. The financial backer would literally write their names under the risk information which was written on a Lloyd's slip.
Insurance underwriters have the task of calculating the risk of insuring people and businesses. The insurance underwriter is responsible for determining the risk factor, how much insurance coverage the business or person needs and how much the business or person will pay for the insurance.
The risk is measured on an exposure scale and the premium is a charge to insure the risk. The primary function of underwriters in the insurance business are to write business (insurance policies) that will make the insurance company money and protect the insurance company from risks that have high potential for loss. To be short, underwriting is the process of distributing insurance policies.
Every insurance company has their own set of guidelines for risk and underwriting. In these cases, companies look at proposals from people or businesses and then decide on whether insurance will be granted. In the case of life insurance, the risk assessment and underwriting process usually requires that the applicant for life insurance provide medical evidence.
Underwriters have the ability to make counteroffers to proposals. Usually these counter offers have a significantly higher premium (considered a loaded premium). The counter offer from a high-risk insurance policy application may also include restrictions on circumstances in which a claim could be paid by the insurance company.
Some insurance companies have an automated underwriting system that uses the rules encoded, which helps reduce the vast amount of manual work required by an underwriter.
Lloyd's of London insurance in London, United Kingdom is a society of underwriters and financial backers. This society can be approached by specially registered insurance brokers to obtain insurance. High risk insurance proposals sometimes have a difficult task of finding insurance, but societies like Lloyd's of London specialize in such risk analysis. The premiums for extremely high risk business or people is often staggering, and the restrictions can be daunting, however, at the end of the day, it's most important to remember that you have complied with insurance regulations set by your lease, company, loan agreement or other agreement and that you have met the compliance issues set out.
Insurance is extremely important, and the task of insurance can not be done without underwriters interpreting risk, doling out restrictions and calculating penalties.
Hugo Reyes writes for Insurance Jobs, a leading recruitment website specialising in actuarial, broking, reinsurance and Underwriting Jobs. Insurance Jobs is the premier resource for those seeking a career in the Insurance sector.
For specific Underwriting Jobs vacancies or other similar jobs visit Insurance Jobs
Article Source: http://EzineArticles.com/?expert=Hugo_Reyes

Monday 8 January 2007

Guys!
Any ideas how to obtain good result in insurance career!

How to carve out a career for insurance