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What Does an Underwriter Do?

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An underwriter evaluates the financial risk to a lender or an insurance company when you're looking to borrow money or purchase a policy. For two of the biggest decisions of your life, buying a home and buying a car, the most important person you'll probably never meet is the underwriter.

Job Description

Underwriters assess risk. Mortgage underwriters meet with potential clients and evaluate information on loan applications. They calculate risk by looking at credit reports and borrowing histories. They research project costs for applications that involve remodeling or renovation. They investigate real estate properties under consideration by potential clients and calculate the return on investment (ROI).

Insurance underwriters perform similar duties. They look at the risk in insurance proposals, determine policy terms and calculate premiums. They conduct research using actuarial, statistical and background information to determine the risk to the insurance company when insuring individuals and groups.

Education Requirements

For most positions, a bachelor's degree is required. Insurance companies and financial institutions generally provide some on-the-job training, There is seldom a formal requirement for an undergraduate major, although a degree in business, finance or a related field can be helpful in landing that first job. Employers look for candidates with solid computer skills. There are a number of certification programs, such as those offered by the American College of Financial Services and the Mortgage Bankers Association. Although certifications are not a legal requirement, they may enhance salary and employment opportunities, particularly for those seeking management positions.

Work Environment

Most underwriters work in corporate offices during normal business hours. Depending on the underwriting specialty, an underwriter may have to travel to meet with clients and attend meetings. Depending on the position and the employer, an underwriter may be required to work evenings and weekends. Underwriters are increasingly using specialized software for their research and calculations.

Salary and Job Outlook

The U.S. Bureau of Labor Statistics (BLS) tracks data and makes projections for the nation's civilian occupations. The BLS reports the median annual salary for insurance underwriters in 2017 was $69,760 per year. Median salary means that half the people with the job title earn more and half earn less. The job outlook is a 5 percent decline in available positions through 2026. Computer software makes it possible to process applications more quickly than ever before, reducing the need for insurance underwriters.

Mortgage underwriters, classified as loan officers by the BLS, earned an annual median salary of $64,660, in 2017. As the overall economy grows, opportunities for mortgage underwriters are expected to grow as well. The BLS estimates there will be an 11 percent increase in jobs, a growth rate considered faster than average compared to all other occupations.


Denise Dayton is a a freelance writer who specializes in business, education and technology. She has written for, Library Journal, The Searcher, Bureau of Education and Research, and corporate clients.

Photo Credits

Jacob Wackerhausen/iStock/Getty Images