When individuals and organizations apply for insurance policies, insurance agents and brokers present the applications to underwriters who work for the insurance company. Insurance underwriters then:
- Review the applications to determine whether the applicant fits the company’s risk parameters
- Check details to ensure the premium charged is enough to offset the insurance company’s risk, and detect fraudulent requests for coverage
- Discuss premiums and coverages with agents and brokers
Underwriters work within corporate policies, principles, and rules for taking acceptable risks. If they decide a risk is not acceptable, they may:
- Adjust the premium or coverage to make the risk acceptable
- Propose changes to the coverage or the deductible
- Accept a portion of the risk, and transfer a portion of the risk to a reinsurance company (a company that insures insurance companies)
- Decline the application for coverage
If the policy needs to be changed after it is in place, underwriters determine whether to accept the proposed changes. They also review the risk at renewal to ensure it remains acceptable. Depending on the company and product line, they may check policies issued by others. In this case, they try to ensure the policies follow guidelines, fit the risks being covered, and charge correct rates.
Insurance underwriters spend much of their time on the phone with, writing letters to, or exchanging emails with insurance agents and brokers, people in other departments of their company (such as claims and legal departments), and others.