what is an underwriter?

As an underwriter, your role is to assess the risks associated with various business decisions. For example, you evaluate loan applications by reviewing data and information on the applicant's employment history, among other factors. You consider the duration of their employment to determine their ability to repay the loan. If an applicant has a stable income from working full-time in a thriving mining company, they are likely to be a low-risk borrower.

In addition to evaluating loan applications, underwriters also assess risks related to other business decisions. For instance, when a company plans to go public, an underwriter evaluates the potential risks and benefits. As an underwriter, you may specialise in specific areas such as mortgage, insurance, or business underwriting. To provide expert services, you need specialised knowledge in your industry. Based on your expertise, you accept or deny risks associated with the company.

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average underwriter salary

If you work as an underwriter, you can expect to earn a yearly salary of $80,000. For those just starting out, the entry-level salary is $70,000 per year. However, with more experience and qualifications, your earnings can increase to over $90,000 annually. The amount you earn will depend on the industry you work in and your level of credentials.

how to increase the salary of an underwriter

As an underwriter, the companies you work for and the industry you work in may affect your salary. For example, if you work for mortgage lenders and banks, your earnings will differ from those of underwriters who work for businesses and private equity firms. Your level of income depends on the level of risk you are dealing with. If you review loan applications for businesses, you are likely to earn more than if you review loans for individuals.

Your qualifications and work experience also play a role in determining your salary. If you are new to the field, you will earn a lower salary. However, as your experience and skills improve, you can negotiate a higher salary. Your location can also impact your earnings. Working in metropolitan areas can give you better pay since these areas have a higher demand for underwriters.

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types of underwriters

Some of the types of underwriters include:

  • equity underwriters: as an equity underwriter, your responsibility is to oversee the issuance and distribution of company stocks. You play a crucial role in determining the price at which shares will be issued when a company transitions from private to publicly traded. Your expertise is also needed in analysing the initial public offering value and assessing demand for the stock.
  • insurance underwriters: as an insurance underwriter, you evaluate the risk an applicant implies. If the chances favour the insurer, you accept the application and outline the guidelines for the applicant. You also review claims submitted by policyholders. You determine the claim's legitimacy and the appropriate coverage amount based on your evaluation.
  • mortgage underwriters: as an underwriter, you evaluate mortgage applications to determine the risks. For instance, you assess the repayment history, debt-to-income ratio and credit exposure.
  • debt security underwriters: as an underwriter, you buy debt instruments like municipal and corporate bonds and sell them to other entities. You sell the debt instruments on behalf of the client at a profit.
Womale sitting at a table in an office looking at a file.
Womale sitting at a table in an office looking at a file.

working as an underwriter

If you want to work as an underwriter, explore the duties, responsibilities and work environments associated with the role.


education and skills

Some of the academic requirements for working as an underwriter include:

  • academic qualification: while educational qualifications are not compulsory, boost your chances of landing employment with a relevant qualification. Complete a vocational education and training like Certificate IV in general insurance.
  • work experience: to work as an underwriter, you require experience. Choose your area of expertise and gain relevant industry experience. If you want to broaden your financial risk assessment options, complete a relevant bachelor's degree in business and major in financial risk management.

underwriter skills and competencies

Some of the qualities of an underwriter include:

  • computer skills: as an underwriter, you perform complex statistical analysis requiring computer software knowledge. Every industry has specific software for underwriters to use in statistical analysis. It helps to know spreadsheet software and other complex statistical tools.
  • analytical skills: as an underwriter, you require exceptional analytical skills to determine an applicant’s risks. With analytical skills, you examine every factor and assess applications appropriately before determining whether to approve or reject them.
  • mathematical skills: as an underwriter, you require an aptitude for maths. While the computation is done using computers, your maths skills help you verify the accuracy of the computations and make informed decisions. Your aptitude for maths also helps you determine the appropriate rate for insurance claims and the premiums that clients should pay.
  • communication skills: as an underwriter, you liaise with various professionals to make informed decisions. You require communication skills to communicate with stakeholders. It is vital to ask the right questions and talk to clients professionally and respectfully. Sometimes, you negotiate with customers, which requires confidence and exceptional communication ability.

FAQs about working as a maths teacher

Here, you will find the answers to the most frequently asked questions about the profession of an underwriter.

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