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

May 13, 2023 / 5 Minutes Read / By Albert

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The demand for Surplus Lines Underwriters has increased significantly in recent years due to the rising number of businesses and individuals seeking specialized coverage not available through traditional insurance providers. As a result, these underwriters are equipped with the necessary knowledge and expertise to provide coverage for a wide range of risks, including those with complex needs or high levels of liability. In addition, they also provide specialized services such as claims investigation and risk management. This increased demand for Surplus Lines Underwriters has enabled them to provide various benefits to their clients, such as better pricing, more comprehensive coverage, and access to more specialized coverage options.

Steps How to Become

Earn a Bachelors Degree. The first step to becoming a surplus lines underwriter is to earn a bachelors degree in a field related to insurance, such as finance, accounting, business administration or economics.
Get Licensed. All states require surplus lines underwriters to be licensed by the state in which they are employed. Generally, this involves passing an exam and completing continuing education courses.
Obtain Relevant Experience. Most employers prefer to hire experienced underwriters. It is common for potential underwriters to start out as a customer service representative or an insurance producer with an insurance company before becoming an underwriter.
Build Necessary Skills. Surplus lines underwriters must possess a variety of skills, such as the ability to evaluate risk, analyze data and set appropriate premiums. It is important for potential underwriters to develop these skills through experience and training.
Network. Networking is an important part of the job search for a surplus lines underwriter. Establishing contacts in the industry can help potential employers become aware of a potential underwriter's qualifications and availability.

It is essential for a Surplus Lines Underwriter to stay updated and capable in order to remain successful. To do so, they should remain informed of changing trends and regulations in the insurance industry by regularly reviewing industry publications, attending webinars and conferences, and engaging with peers in their field. Additionally, they should keep their technical skills sharp by staying up-to-date on the latest software programs, technologies, and processes used in the industry. Doing so will ensure that they are well-equipped to handle the demands of their role and make informed decisions that benefit their company.

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Job Description

Develop and maintain relationships with surplus lines brokers and agents.
Analyze risk criteria to determine acceptability and pricing of business.
Prepare and present underwriting decisions to management.
Develop and manage underwriting strategies.
Manage and monitor portfolio performance.
Make decisions on renewal and new business.
Review policy forms, endorsements, and applications for accuracy and compliance.
Monitor industry trends to ensure that underwriting practices are current.
Negotiate terms and conditions with brokers and agents.
Document underwriting files with appropriate information.
Monitor underwriting results and adjust strategies as needed.
Participate in rate filings and product development initiatives.
Analyze business opportunities to determine appropriate level of risk.
Manage workflow of underwriting staff to ensure quality and timely service.
Identify opportunities for process improvement and recommend changes to management.

Skills and Competencies to Have

Expert knowledge of state laws regarding surplus lines insurance
Ability to analyze and assess risk
Ability to negotiate terms with underwriting partners
Proficiency in financial and statistical analysis
Capacity to understand and interpret complex insurance documents
Strong communication skills to effectively explain complex insurance policies to clients
Excellent organizational and time management skills
Ability to work independently and collaboratively in a team environment
Capacity to build relationships with customers and brokers
Proficiency in Microsoft Office Suite and other computer systems
Ability to stay current on industry trends and news

Having strong analytical skills is one of the most important skills for any Surplus Lines Underwriter to possess. The ability to thoroughly analyze complex risks is essential in order to make informed decisions about which policies should be offered and at what price point. Analytical skills also allow underwriters to compare different policies and premiums in order to find the best deal for their client.

an underwriter must be able to effectively communicate with clients, brokers and other insurance professionals in order to understand the risks and exposures associated with a policy. A successful underwriter must have the ability to assess risk, understand the legal and regulatory environment, have a good understanding of the insurance markets and be able to negotiate favorable terms and conditions. All of these skills are necessary in order for an underwriter to provide the best possible service to their clients.

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Frequent Interview Questions

What experience do you have in the surplus lines market?
Describe your experience with complex risk assessment and pricing?
How do you ensure accurate underwriting standards and procedures?
How do you keep up with industry changes and trends?
What strategies do you use when evaluating risk exposure?
How do you remain compliant with state and federal regulations?
What is your experience in developing new policies and procedures?
What challenges have you faced while underwriting surplus lines policies?
What strategies do you use to improve customer service and satisfaction?
How would you handle an underwriting situation that requires a creative solution?

Common Tools in Industry

Rating Software. Used to determine premium rates for the insurance policy underwritten. (eg: ISO-Rater)
Risk Analysis Software. Used to assess the risk associated with an insurance policy. (eg: RiskProfiler)
Policy Administration Software. Used to manage policy documents and associated data. (eg: PolicyPlus)
Claims Management Software. Used to manage claims processing and reporting. (eg: ClaimTracker)
Financial Management Software. Used to monitor financial performance and accounts receivable. (eg: FinAnalyzer)
Compliance Management Software. Used to ensure compliance with state and federal regulations. (eg: RegWatch)
Reinsurance Management Software. Used to manage reinsurance contracts and associated data. (eg: ReinsurePro)
Document Management Software. Used to store and retrieve documents related to the underwriting process. (eg: DocuSafe)
Underwriting Guidelines. Used to ensure underwriting decisions are consistent with the company's risk appetite. (eg: Underwriting Guidelines Manager)

Professional Organizations to Know

Surplus Lines Association of America (SLAA)
National Association of Professional Surplus Lines Offices (NAPSLO)
American Association of Managing General Agents (AAMGA)
International Risk Management Institute (IRMI)
National Association of Insurance Commissioners (NAIC)
Professional Liability Underwriting Society (PLUS)
Risk and Insurance Management Society (RIMS)
Chartered Property Casualty Underwriters Society (CPCU)
Reinsurance Association of America (RAA)
American Institute for Chartered Property Casualty Underwriters (AICPCU)

We also have Automotive Underwriter, Claims Underwriter, and Structured Finance Underwriter jobs reports.

Common Important Terms

Surplus Lines Insurance. A type of insurance policy purchased from an insurer that is not licensed in the state where the policyholder resides. These policies are usually more expensive than policies purchased from licensed insurers, but they can provide coverage in areas that those insurers may not offer.
Risk Analysis. The process of evaluating a situation and the potential risks associated with it. Risk analysis helps identify potential hazards, determine the likelihood of their occurrence, and assess the impact of those risks on the organization.
Reinsurance. The practice of transferring risk from one insurer to another, typically in the form of a contract between two or more insurers. Reinsurance is often used to spread out the risk associated with large losses and reduce the financial burden on any one insurer.
Underwriting. The process of evaluating an insurance policy application to determine if it is acceptable for coverage and the amount of premium that should be charged for that coverage. Underwriters consider factors such as the applicant's age, health, and lifestyle when making this determination.
Actuarial Science. The science of analyzing and managing risk. Actuaries use mathematical models and statistics to calculate and assess the likelihood of certain events occurring and their potential cost, helping to manage risk levels within an organization.

Frequently Asked Questions

What is a Surplus Lines Underwriter?

A Surplus Lines Underwriter is an insurance company or individual who specializes in providing insurance coverage for risks that are not accepted by the standard insurance market.

Who regulates Surplus Lines Underwriters?

Surplus Lines Underwriters are regulated by state-level departments of insurance in the United States.

What is the Nonadmitted and Reinsurance Reform Act of 2010?

The Nonadmitted and Reinsurance Reform Act of 2010 (NRRA) is a federal law that governs the placement of surplus lines insurance in the United States. It seeks to provide a uniform regulatory environment for surplus lines insurers by requiring states to recognize certain filings from other states.

What is the NRRA Risk Retention Group Exemption?

The NRRA Risk Retention Group Exemption allows a Risk Retention Group (RRG) to be treated as a surplus lines insurer and exempts the RRG from certain premium taxes and fees.

What is a Risk Retention Group?

A Risk Retention Group (RRG) is an association of companies that come together to insure their own risks and are regulated by the Liability Risk Retention Act of 1986.