How to Be Commercial Underwriter - Job Description, Skills, and Interview Questions

Jul 28, 2020 / 5 Minutes Read / By Albert

How to Become

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When businesses purchase insurance, they want a commercial underwriter to evaluate their risk and create a tailored policy for them. This process involves researching the company's operations and financials, analyzing the risks, and then using that analysis to create a policy that meets the business's needs. As a result, commercial underwriters must have a deep understanding of the insurance industry, business operations, and financial regulations.

Their expertise ensures that companies get the coverage they need at a reasonable rate and protects them from unexpected losses. commercial underwriters also act as a resource for businesses as they are familiar with industry trends and can advise on appropriate coverage.

Steps How to Become

Obtain an Underwriting License. To become a commercial underwriter, you must obtain an underwriting license from your state's department of insurance. Each state has its own specific requirements for obtaining a license, but all require that you either pass an exam or take an approved course.
Pursue Education and Training. Many states require that you have some education and training in order to obtain an underwriting license. This may include taking classes in accounting, business, finance, and law.
Get Experience. Most insurance companies require that you have some prior experience in the field. This could be in the form of an internship or prior job experience. Additionally, you may be asked to take additional courses or seminars related to underwriting before being hired.
Apply for Jobs. Once you have obtained your license and have the necessary experience and education, you can begin applying for commercial underwriting jobs. Most companies will require you to submit a resume and cover letter along with your application.
Take the Job. Once you have been offered a job, you will need to accept the position and begin work as a commercial underwriter. Your duties will likely include assessing risk, analyzing financial documents, and reviewing applications for insurance coverage.

Commercial underwriting requires a combination of knowledge, skill, and experience to be successful. Having the right qualifications and expertise is essential for a successful career as a commercial underwriter. To be successful in this field, one must possess a thorough knowledge of commercial insurance policies and the ability to analyze risk and determine appropriate coverage.

one must have strong analytical and problem-solving skills, as well as excellent communication and negotiation skills. Furthermore, experience in dealing with complex insurance transactions and policies is beneficial, as this can help an underwriter better assess risk and make more informed decisions. these skills and qualifications are essential to becoming a successful commercial underwriter.

You may want to check Military Lines Underwriter, Corporate Underwriter, and Credit Underwriter for alternative.

Job Description

Develop and maintain relationships with agents, brokers, and customers to ensure a high level of service
Analyze risk data to evaluate exposures and determine appropriate rate, terms and conditions
Review and negotiate insurance contracts to ensure compliance with company standards
Develop and maintain underwriting guidelines and procedures
Monitor industry trends and changes in regulations to ensure compliance
Monitor and analyze loss data to identify trends and develop strategies to manage risk
Assess customer financial and operational data to evaluate their ability to pay premiums
Provide guidance and instruction to junior underwriters
Track and monitor underwriting performance to identify areas for improvement
Prepare reports for senior management on underwriting performance

Skills and Competencies to Have

Excellent written and verbal communication skills
Ability to analyze, interpret and explain complex information
Knowledge of the commercial insurance market and products
Proficiency in using underwriting software
Strong problem solving and decision making skills
Knowledge of applicable laws and regulations
Ability to manage multiple tasks and prioritize effectively
Highly organized and detail-oriented
Excellent customer service skills
Ability to work independently and as part of a team

Commercial underwriters play a critical role in the financial industry by assessing the risks associated with investments and providing guidance on whether to accept or reject them. This requires a variety of skills, but the most important is the ability to analyze financial data. Commercial underwriters must be able to assess the potential for return on investment and weigh the risks associated with any given investment.

They must also have an understanding of the markets in which they are operating and be able to identify potential trends in those markets. Furthermore, they must have excellent communication skills to effectively explain their analysis to clients and stakeholders. With these skills, commercial underwriters can help their clients make sound financial decisions, avoiding losses and promoting gains.

Property and Casualty Underwriter, Senior Underwriter, and Mortgage Underwriter are related jobs you may like.

Frequent Interview Questions

What experience do you have in commercial underwriting?
Describe a time you had to make a difficult underwriting decision.
How do you stay up to date on changing regulations and industry trends?
What techniques do you use to assess risk when underwriting commercial policies?
How do you ensure that you are meeting the underwriting standards of the company?
What strategies do you use to evaluate the financial strength of a customer in order to issue a policy?
How do you handle customer complaints and disputes related to underwriting decisions?
What experience do you have in negotiating terms and conditions of commercial policies?
What do you think are the biggest challenges facing commercial underwriting today?
How do you ensure that all customer documentation is accurate and up to date?

Common Tools in Industry

Risk Modeling Software . Software used to evaluate a company's risk profile and create risk management plans. (eg: Moody's Risk Analyst)
Data Analysis Tools . Software used to collect, analyze, and interpret data. (eg: Tableau)
Financial Analysis Software . Software used to create financial models to evaluate the performance of a company. (eg: Bloomberg Terminal)
Document Management Systems . Software used to store, organize, and share documents securely. (eg: SharePoint)
Insurance Rating Software . Software used to generate rate quotes for commercial insurance policies. (eg: Zywave)
Underwriting Software . Software used to automate and streamline the underwriting process. (eg: Guidewire)

Professional Organizations to Know

Chartered Insurance Institute (CII)
The Institutes
American Risk and Insurance Association (ARIA)
Association of Professional Insurance Women (APIW)
National Association of Professional Surplus Lines Offices (NAPSLO)
Society of Chartered Property and Casualty Underwriters (CPCU)
National Association of Professional Agents and Brokers (NAPAB)
National Association of Insurance Commissioners (NAIC)
National Association of Insurance and Financial Advisors (NAIFA)
Reinsurance Association of America (RAA)

We also have Aviation Underwriter, Catastrophe Underwriter, and Claims Underwriter jobs reports.

Common Important Terms

Rating The process of assessing the risk of a potential customer and setting an appropriate premium.
Coverages The types of losses a policy covers and the limits of liability associated with them.
Deductibles The amount of money the policyholder must pay out of pocket before their insurance coverage kicks in.
Prospective Rating Using historical data to predict future losses.
Retrospective Rating Adjusting premiums based on the actual losses incurred by the customer.
Policy Limits The maximum amount the policy will pay out in the event of a claim.
Underwriting Guidelines Guidelines used by underwriters to determine whether to accept or reject a risk.
Risk Assessment Evaluating the probability that a customer will suffer a financial loss.
Claims History A record of past claims filed by a customer and their settlement amounts.
Reinsurance An arrangement where an insurance company transfers some of its risk to another insurance company.

Frequently Asked Questions

What is a Commercial Underwriter?

A Commercial Underwriter is a professional who evaluates and assesses applications for insurance coverage and determines the terms and conditions of the policy. They are responsible for determining the risk associated with providing coverage, assessing the applicant's financial stability, and managing the overall underwriting process.

What qualifications are required to become a Commercial Underwriter?

To become a Commercial Underwriter, one must possess a bachelors degree in a related field, such as finance or business, and have a minimum of two years of experience in insurance underwriting. Additional qualifications may include certifications such as Chartered Property Casualty Underwriter (CPCU) or Associate in Risk Management (ARM).

What skills are necessary for a Commercial Underwriter?

A Commercial Underwriter must possess strong analytical skills, be able to make sound decisions based on risk assessment, have excellent communication and negotiation skills, and be knowledgeable about the insurance industry and related legal and regulatory requirements.

What is the average salary for a Commercial Underwriter?

The average salary for a Commercial Underwriter is $78,000 per year, according to PayScale.com. The actual salary will depend on the individual's experience and the industry they work in.

What type of policies does a Commercial Underwriter review?

A Commercial Underwriter reviews a variety of policies, such as property and casualty insurance, workers' compensation, health insurance, life insurance, disability insurance and vehicle insurance. They are responsible for assessing the risk associated with each policy and determining appropriate coverage.