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Who is a Underwriter?
Underwriting has turned Insurance into a need and it is no more a privilege ~ Michelle Miller
An underwrite plays crucial roles in the finance and insurance industry and works for mortgage, loan, and insurance companies. He or she analyses applications for insurance policies and assess the risk capacity to decide whether to approve application or reject. He or she assesses and evaluates the risk of another party for a fee in the form of commision or premium.
Underwriters have strong analytical skills and they understand the insurance principle to evaluate the health of potential clients. They collaborate with agents, brokers, and to their clients to collect information and explain the insurance product details. They work on all kinds of insurance like mortgage, health insurance, life insurance, automobile, and several other kinds of insurance.
Quick Facts for Underwriter
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Industry
Finance
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Average Salary in India
₹51000
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Suitable for
Male, Female
An underwriter in India has several advantages due to the vast career opportunities available in this field where an individual’s gender is insignificant. An individual with any gender can opt for this career.
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Any special needs
Yes
If an individual can carry out all the duties without the efficiency of the work being affected then he or she can become an underwriter even if he or she is differently-abled.
Table of Contents for Underwriter
What is the role of Underwriter?
An underwrite is a person who assesses the risk of an applicant and decides to make a policy deal or reject the application. For example, an underwriter who works with health insurance companies analyses the health risks of applicants. Individuals in the underwriter career path check the applicant's details including age, current health status, and medical and family history.
Using this information and after other formalities, an underwriter will enter information into the underwriting software. The software will determine the amount of premium and terms the insurance-providing company must apply to the policy. An underwriter of a health insurance company will review medical information, while a loan underwriter will assess factors such as the credit history of the client.
The work of an underwriter is complex. An individual in the underwriter career path should be able to determine the acceptable level of risk and what one is allowed to admit according to a risk assessment.
An underwriter strictly follows all policies of the company in order to keep applicants from trouble in the future. He or she explains every detail to the clients.
An underwriter's job involves meeting new clients and understanding what he or she wants whether an insurance or a loan.
Before granting a loan or deciding the terms of an insurance, an underwriter does a risk analysis by taking all relevant information from the client.
Once an underwriter has done all the background checks and risk analysis, he or she fills in the report depending on a company’s policies.
Types of a Underwriter
Underwriters are required in various fields along with insurance such as banking and finance, real estate, investment banking, credit card companies, automotive finance, and risk management. Below we have mentioned a few types of underwriting careers with their descriptions.
Mortgage Underwriter: A mortgage loan underwriter ensures that the loan applicant meets all of these requirements, and thereafter approves or rejects the loan. A mortgage underwriter also reviews property assessments to ensure that he or she is accurate and that the home has almost the purchase price as the loan value.
Insurance Underwriter: Insurance underwriter reviews applications for information and accepts or rejects an applicant based on risk analysis. An insurance underwriter is the one who reviews all the data and decides whether to offer it or not. Additionally, an insurance underwriter advises on risk management issues, determines available coverage for specific clients based on several parameters, and reviews existing clients for continued coverage analysis.
Equity Underwriter: In equity markets, an underwriter administers the public issuance and distribution of securities which is in the form of common or preferred stock. These stocks can be from a corporation or other issuing body. The most prominent role of an equity underwriter is in the Initial Public Offering (IPO) process. Underwriter IPO is also a term used for equity underwriting job roles.
Debt and Security Underwriter: An underwriter purchases debt securities, which include government bonds, corporate bonds, municipal bonds or preferred stock, from the issuing body in order to resell them for a profit. This profit is known as the ‘underwriting spread.’ An underwriter has a choice of either reselling debt securities directly to the marketplace or one could also sell them to dealers, who will sell them to other buyers.
What is the workplace/work environment of Underwriter like?
An underwriter career path involves spending most of his or her time in the office environment itself. As a result, the working hours are mostly between 9 am to 5 pm. Individuals who opt for a career as an underwriter may sometimes have to work over stretched hours depending on the task at hand.
It is a desk job and the individual generally works in an office on a desk and in a clean environment. One does not have to do any kind of physical work. There are types of underwriting jobs such as insurance underwriter jobs, IPO underwriter and loan processor. A loan processor definition could be as a mortgage processor responsible for preparing the mortgage application and paperwork.
Does Underwriter require travelling?
Not Likely
Underwriting is an appropriate job for those who do not like to travel much during their work hours and sit and work peacefully. The work functions of the underwriter do not require traveling. Individuals in the underwriter career path may have to travel occasionally in order to meet the company’s stakeholders or clients.
Time Pressure
Likely
There can be time pressure involved in an underwriter’s job. Although the work pressure is not frequent in nature.
How to become a Underwriter?
Steps to become a Underwriter
If you possess a keen analytical mind and enjoy assessing risks, a career as an underwriter in India might be your ideal path. In this guide on how to become an Underwriter in India, we will explore the intricate world of underwriting, offering insights into the necessary skills, education, and steps to embark on a successful journey as an underwriter in the Indian financial landscape.
What are the skills and qualities required to become a/an Underwriter?
To become an underwriter it is necessary for individuals to develop a certain skill set to function as an underwriter. These skills can be learnt overtime, we have mentioned these skills below.
Efficiency: With an increase in the rate of industrialisation and the growing awareness amongst people for getting insurance there is a significant amount of workload that has increased. Therefore, as an underwriter, one must be efficient in doing his or her work. Individuals have several clients to deal with and if he or she lacks efficiency then the work can get tedious.
Communication skills: It is essential as an underwriter that one is able to communicate well and keep a clear message across his or her clients. Individuals who opt for a career as an underwriter need to communicate with their clients in order to know about several details which are required in order to provide insurance.
Attention to detail: As an underwriter, an individual’s job is to research as well as collect data and then analyse them to determine if a client should be given insurance or not. Therefore, it is essential for him or her to keep a keen eye on every detail that he or she has about the client. One cannot afford to miss any kind of detail.
Rationality: In order to increase the company’s chances of earning a profit an underwriter must make rational decisions. An underwriter must be rational in his or her approach while approving or denying a client’s proposal. Setting up goals that are almost impossible to achieve can lower the individual’s morale and this can affect his or her productivity. Therefore, one must set rational and achievable goals.
Decision-making skills: In an underwriter career path, one must have the capability to make the right decisions. There are times when one has to choose between multiple policies to go with, a good underwriter will make sure to go with the one which offers the lowest amount of risk.
Which certifications and internships can be helpful in becoming Underwriter?
When it comes to obtaining certification related to career, one must consider those certifications which are relevant and provide actual industry knowledge and skills. We have mentioned below some of the helpful certification for the underwriter job role.
Financial Analysis and Decision Making with Xero and Tableau
Understanding Public Financial Management: How Is Your Money Spent?
Adaptive Markets: Financial Market Dynamics and Human Behavior
Internship Availability
The underwriter career path is about understanding several policies and strategies for the company while keeping several potential business risks in mind. The policies can be learned in a better way by doing it practically. The internships provide the candidates with real-world experience. It is a way of knowing the underwriter career path before professionally joining it.
Internships provide an aspiring candidate with the opportunity to apply theoretical knowledge and put it in use. Not only that, but internships also enable a candidate to make connections in the field for future use. If he or she performs well during an internship several companies or organisations could also hire a candidate on a full-time basis.
Underwriter Jobs and Salaries
Junior Underwriter
Permanent
- Average Salary 40000
Job Description
A junior underwriter supports the underwriting team with loan processing and insurance application. He or she collects and verifies documents to ensure compliance with regulations. He or she may also be involved in analysing financial data and assisting the team in risk identification.
Salary Description
On average the salary of junior underwriters in India ranges between Rs. 2.3 Lakhs to Rs. 8 Lakhs with an average annual salary of Rs. 5 Lakhs.
Senior Underwriter
Permanent
- Average Salary 62000
Job Description
A senior underwriter performs more complex and important tasks of underwriting. He or she leads the underwriting team and supports decision making. He or she is responsible for developing and implementing underwriting strategies, evaluating profitability and risks with applications.
Salary Description
In India senior underwriters are paid well, they earn between Rs. 3.6 Lakhs to Rs. 12.3 Lakhs per with an average annual salary of Rs. 7.4 Lakhs.
Source: AmbitionBox
What is the job outlook for Underwriter?
Candidates who wish to become underwriters experience significant job growth. Underwriters are required in various fields along with insurance such as banking and finance, real estate, investment banking, credit card companies, automotive finance, and risk management. An underwriter who has the experience and a decent set of skills can easily get an underwriting job in any financial firm.
With so much advancement in technology, an increasing number of changes and developments are entering the market which has, in turn, increased the rate of insurance as well as loans in the market. It has led to an increase in demand for an underwriter. Not just big banks need an underwriter but even smaller insurance companies are hiring an increasing number of underwriters.
Frequently Asked Questions for Underwriter
Que. What degree is needed to be an underwriter?
Ans.One does not need a specific bachelor's degree to become an underwriter, but courses in mathematics, business, economics, and finance are beneficial in this field. A good underwriter is also detail-oriented and has excellent skills in math, communication, problem-solving and decision making.
Que. Is underwriter a good career?
Ans.The field of underwriting is very competitive in nature and it can be a little stressful at times. But, it is a well-paying job and after gaining experience of a few years one could also gain a promotion.
Que. Can you get an underwriter’s job with no experience?
Ans.It is necessary to have completed a degree in any field before planning to become an underwriter. An individual can get an entry-level job after completing his or her bachelor’s degree.
Que. Are underwriters in demand?
Ans.Underwriters have increasingly been in demand for the past five years. Several organisations are hiring people at the post of an underwriter therefore, yes an underwriter is in demand.
Que. Who can become an underwriter?
Ans.Individuals with a background in finance, business, or related fields often become underwriters. Many underwriters hold degrees in finance, economics, or risk management. Strong analytical and decision-making skills are crucial for this role.
Que. Do underwriters make money?
Ans.Yes, underwriters typically earn a salary, and their compensation may include bonuses or commissions based on the volume and quality of their underwriting decisions. The income varies based on factors such as experience, industry, and the employing company's policies.
Que. What is the minimum salary of an underwriter?
Ans.The minimum salary of an underwriter in India can vary, but it typically ranges from ₹3 to ₹5 lakhs per annum for entry-level positions. However, salaries may be influenced by factors such as experience, location, and the employer's policies. It's advisable to check with specific companies for accurate and up-to-date information.
Que. Is underwriting a stressful job?
Ans.Underwriting can be stressful due to the responsibility of assessing and managing risks. Deadlines, complex decisions, and the need for precision can contribute to stress. However, individuals with strong analytical skills and the ability to handle pressure may find the challenges rewarding.
Que. How to become an underwriter in an insurance company?
Ans.To become an underwriter in an insurance company, individuals typically need a bachelor's degree in finance, business, or a related field. Gaining relevant internships or entry-level positions in insurance can provide valuable experience. Developing strong analytical and communication skills is crucial, and some underwriters pursue professional certifications to enhance their qualifications.
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Questions related to Underwriter
Question : What is the primary role of an underwriter in the capital market?
Option 1: Buying and selling securities on behalf of investors
Option 2: Facilitating the trading of government bonds
Option 3: Assisting companies in issuing securities
Option 4: Regulating the stock exchanges
Correct Answer: Assisting companies in issuing securities
Solution : The correct answer is (c) Assisting companies in issuing securities.
The primary role of an underwriter in the capital market is to assist companies in issuing securities. When a company wants to issue new securities, such as stocks or bonds, it may engage the services of an underwriter. The underwriter acts as an intermediary between the company issuing the securities and potential investors. The underwriter helps the company determine the optimal pricing and structure for the securities being offered. They assess market conditions, investor demand, and other factors to determine the appropriate terms of the securities issuance. This includes determining the offering price, the number of securities to be issued, and the timing of the issuance.The underwriter plays a crucial role in the capital market by facilitating the smooth and efficient issuance of securities, helping companies raise capital, and ensuring that investors have access to investment opportunities.
Answer laterQuestion : What is the primary role of an underwriter in the capital market?
Option 1: Buying and selling securities on behalf of investors
Option 2: Facilitating the trading of government bonds
Option 3: Assisting companies in issuing securities
Option 4: Regulating the stock exchanges
Correct Answer: Assisting companies in issuing securities
Solution : The correct answer is (c) Assisting companies in issuing securities.
The primary role of an underwriter in the capital market is to assist companies in issuing securities. When a company wants to issue new securities, such as stocks or bonds, it may engage the services of an underwriter. The underwriter acts as an intermediary between the company issuing the securities and potential investors. The underwriter helps the company determine the optimal pricing and structure for the securities being offered. They assess market conditions, investor demand, and other factors to determine the appropriate terms of the securities issuance. This includes determining the offering price, the number of securities to be issued, and the timing of the issuance.The underwriter plays a crucial role in the capital market by facilitating the smooth and efficient issuance of securities, helping companies raise capital, and ensuring that investors have access to investment opportunities.
Question : What is the primary role of an underwriter in the capital market?
Option 1: Buying and selling securities on behalf of investors
Option 2: Facilitating the trading of government bonds
Option 3: Assisting companies in issuing securities
Option 4: Regulating the stock exchanges
Correct Answer: Assisting companies in issuing securities
Solution : The correct answer is (c) Assisting companies in issuing securities.
The primary role of an underwriter in the capital market is to assist companies in issuing securities. When a company wants to issue new securities, such as stocks or bonds, it may engage the services of an underwriter. The underwriter acts as an intermediary between the company issuing the securities and potential investors. The underwriter helps the company determine the optimal pricing and structure for the securities being offered. They assess market conditions, investor demand, and other factors to determine the appropriate terms of the securities issuance. This includes determining the offering price, the number of securities to be issued, and the timing of the issuance.The underwriter plays a crucial role in the capital market by facilitating the smooth and efficient issuance of securities, helping companies raise capital, and ensuring that investors have access to investment opportunities.
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