How To Become an Underwriter and What Underwriters Do

By Indeed Editorial Team

Published 27 July 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Underwriting is a broad career path with opportunities in healthcare, finance and insurance. If you're interested in analysing numbers, communicating with others and thinking critically, this could be a great role for you. Learning more about this position could help you determine if it's something you want to pursue, and if so, what your next steps are. In this article, we show you how to become an underwriter and provide important advice about this career path, including the average salary and helpful skills, to help you decide.

What is an underwriter?

An underwriter is a professional who evaluates an individual's risk to determine whether they qualify for certain loans or insurance plans. These professionals can work in a variety of industries, including insurance, finance and healthcare. They work on behalf of a company or agency and evaluate an individual before extending coverage. This may involve assessing the individual's file, reviewing the company's policies and identifying additional risk factors.

For example, an underwriter might work for a bank and assist with the mortgage process. When an individual applies for a mortgage on a new house, the underwriter reviewers their file, assesses their risk, compares the risk to the bank's policies and approves the mortgage loan.

What does an underwriter do?

An underwriter examines loan, mortgage, insurance or securities applications to determine risk. They base their assessment on a careful analysis of the candidate's data. An underwriter's job responsibilities include:

  • Examining applications for loans, mortgages, insurance or initial public offerings

  • Calculating the risk based on information provided through the application process

  • Conducting research to evaluate an application

  • Using computer software to help make an approval decision

  • Approving or declining each application based on the risk

How to become an underwriter

Here are the steps you can take to help you become an underwriter:

1. Earn a degree

After completing secondary school, consider earning a bachelor's degree before beginning your career. Most employers require this degree, although some may accept candidates who are working toward a relevant diploma or certification program. Although there are no specific degree requirements for this career, a degree in finance or a finance-related field can help you develop your industry knowledge and math skills. Common areas of study include mathematics, business, accounting and economics.

Any coursework you can do to improve your computer skills can also benefit you. Some companies that hire underwriter managers may seek candidates with a master's degree in business administration, although this is usually optional in this field. A master's degree could help you qualify for more advanced or competitive roles.

2. Gain professional experience

Most underwriters start out working for a bank or a similar financial services company in an entry-level position. They might work as an underwriter's assistant or an underwriter under the direct supervision of a senior underwriter. This job can help you develop your industry knowledge, such as what risk factors are most important in your field. It can also help you build your technical skills, such as how to analyse risk and use certain underwriting software. As you progress in knowledge and experience, you may move into more independent roles at the same company.

When applying for entry-level positions, consider your ideal work environment and interests. It's possible to move between industries as an underwriter, but gaining relevant technical knowledge may help you excel in your career. For example, if you're interested in working in insurance, you may want to apply for an assistant or associate role at an insurance agency, rather than at a bank. Similarly, if you're most interested in finance and banking, you may apply for these positions instead.

Related: How To Write Work Experience on a CV (With Examples)

3. Explore certifications

A certification is optional for many underwriting roles, but it establishes you as an underwriter and potentially increases your salary. Look for certification programs within your particular field of underwriting. For example, if you're working as an insurance underwriter, you might consider being certified as a Chartered Life Underwriter (CLU). You can earn this designation through The American College and The Life Underwriters Association of Hong Kong. To earn this certification, you can apply online after you gain three years of relevant work experience. Then, you need to take courses focused on insurance underwriting and pass a series of exams.

You may also apply for certification in insurance underwriting through the Chartered Insurance Institute (CII). This involves taking a preparatory course, lasting approximately 10 weeks, and then completing a series of exams. Alternatively, if you're interested in real estate underwriting, you might pursue a Certified Residential Underwriter Designation (CRU) through the Mortgage Bankers Association (MBA). This involves completing online courses and taking a series of courses. There are different designation letters to show beginner, intermediate and advanced training.

4. Apply for advanced roles

After completing your education, optional certifications and earning relevant experience, you may begin applying for underwriting positions. Update your CV and cover letter to add your most recent experience and skills. Consider reviewing the initial job posting to determine what skills, experience and certifications the employer is seeking. If you have those skills, be sure to highlight them to show your qualifications.

Related: 6 Universal Rules for Writing Your CV

Average salary for underwriters

The national average salary for underwriters is HK$434,511 per year. Your salary can vary depending on your place of employment, education, experience, certifications and speciality.

Important skills for underwriters

Underwriters need a certain set of skills to excel within the role, including:

Computer skills

Underwriters use computer software to calculate risk. Each industry has its own specific software underwriters need to learn and become comfortable with. It can be helpful to learn spreadsheet software and file-sharing programs, since you may use them to complete your daily tasks. You may also need to use a computer to conduct research.

Analytical thinking

Many factors determine an applicant's risk. A good underwriter can examine each factor, assess it appropriately and come to a sound decision. Computer software can be a useful tool to help make that decision. However, you still need to examine these results to decide whether you should approve an application. Analytical reasoning can help you make this final decision.

Read more: Analytical Thinking: Definition, Examples and Tips

Mathematical skills

Although computers perform most of the math involved in an application, underwriters need to verify the accuracy before making a decision. In finance, professionals use statistics and probabilities to calculate appropriate lending rates. In the insurance industry, you can use math skills to determine the likelihood that the applicant will file a claim, which can affect coverage prices.

Communication skills

Part of an underwriter's research work involves communicating with customers. To succeed, they can use strong communication skills to speak clearly and ask the right questions in a friendly and professional manner. It's also important that they listen carefully to the answers so they can respond appropriately. Underwriters often negotiate with customers and investors, which requires them to have confidence in their communication ability. Professional communication skills may also help attract potential clients.

FAQ about becoming an underwriter

Here are the answers to some commonly asked questions about becoming an underwriter:

Is underwriting a good career?

Whether underwriting is a good career for you depends upon your personal goals, preferences, education and interests. Consider creating a list of your career objectives and interests to help you determine if this is a good opportunity. Also, consider comparing the average salary and work environment of this career path to your own needs and preferences. This way, you can determine whether you would be a good fit for the role.

Related: Choosing a Career Path in 11 Steps

How long does it take to become an underwriter?

The time it takes to become an underwriter can vary depending upon your previous education, training and experience. For example, if you already have your bachelor's and you've worked in a bank for several years, you may begin applying for an underwriter role.

If you're just beginning your career path, it takes four years on average to earn a bachelor's. Most companies also seek underwriters who have experience in a relevant field, such as banking, finance or insurance, although there are no specific minimums. To earn a designation, such as the CLU designation, you need at least three years of professional experience. Completing the designation can take several weeks or months depending on the course you take.

What is an underwriter's typical work environment?

Underwriters typically work in an office setting. They sit for extended periods of time while working at a computer, either entering or analysing data. They may occasionally interact with agents, either in person, over the phone or via email. It's also possible for underwriters to travel to attend meetings. Most underwriters work within financial services, usually with a bank, a credit union, insurance agency or investment company. Underwriters typically work normal business hours with occasional overtime.

Salary figures reflect data listed on Indeed Salaries at time of writing.