Everything you need to know about becoming an underwriter

Underwriters are often an integral step in any financial process, yet they hardly receive the recognition they deserve. Working behind the scenes, they scan legal documents for inaccuracies and assess the risk of an investment.

Their knowledge of any one situation, investment, or pattern could make or break someone’s financial endeavor, and — though the number of underwriters is in decline due to automation — the workforce is currently in need of more of these particular experts.

We’ve got the details on underwriters, what they do, and how to succeed in the profession, below.

What is an underwriter?

According to Investopedia, an underwriter is a person or entity that assesses and absorbs risk for corporations and businesses. In some cases, an underwriter is an entire organization, and in others, the person taking responsibility for the risk is a sole entity.

What does an underwriter do?

Underwriters evaluate applications of all sorts and determine whether to move ahead with something. They assess risk — for all involved parties — and make a decision based on their institution’s regulations. Often, these risk assessments are made based on industry trends and patterns, intuition, and a wealth of business knowledge.

For example, mortgage underwriters fact-check in the home loan process. They dig through bank records, documents, and additional paperwork to ensure that the information you provided the institution you’re applying to is 100% fact. They verify property owners, assess risks, and are often the final stamp of approval on your mortgage or loan investment.

Insurance underwriters exist to assess risk regarding insurance policies taken out on a home, car, or driver. They are also there for the final approval on insurance rates for a business or financial endeavor, or even life insurance policies.

Though the initial underwriting process has been streamlined by an automated technology system for the bulk of insurance requests, there are a variety of underwriting specialists who exist to help when the details get a little messier, or the insurance request isn’t run-of-the-mill paperwork on an apartment.

Another notable position in this field includes securities underwriters, who assess company risks involving initial public offerings (IPOs) and more. These are often completed by underwriters employed by investment banks and more formidable institutions.

How do you become an underwriter?

Underwriters begin with a bachelor’s degree in a field related to the work. Economics, mathematics, accounting, and finance are good places to start, but the degree you pursue is largely inconsequential, especially if you are shifting careers to this space. As with many other positions in finance and law, there is a considerable amount of continuing education in addition to certification programs necessary to complete for employment.

For example, your employer might insist you become a Certified Residential Underwriter with the Mortgage Bankers Association, certify with the National Association of Mortgage Underwriters (NAMU), or receive training through CampusFHA. Depending on your niche industry, you might explore some other certification options and consider getting ahead with an internship or reaching out to a mentor in the field.

Most underwriters are hired at an entry or junior level and trained by senior analysts and underwriters. However, those with applied real-world experience and completed certifications are often considered, and largely have value to add from their perspective in a different field or position.

What skills do you need to become an underwriter?

An underwriter, first and foremost, must possess very acute attention to detail. Not only does every job description ever published require it, but an underwriter is a fact-checker. They’re responsible for sensitive information and data about strangers.

Their job is to judge a situation and a person’s capability of succeeding by constantly updating trends and information they are just learning about an individual. They’re often the deciding factor between a “yes” on your dream home or entrepreneurial endeavor, so attention to detail is, in this case, a must.

Knowing your way around a computer is vital to a position as an underwriter. Much of your research exists online, and the information you are provided is often accessible through a database. (Good for everyone, going green!) Plus, there is all of the math you are subject to, which often requires spreadsheet access. Be sure to stay up to date on your Mac hacks and keyboard shortcuts to stay running like a well-oiled machine.

Though underwriters belong in a field massively occupied by agents and brokers, they exist tangentially. They are often not involved in the sales process and don’t require the charm or heightened communication skills of a run-of-the-mill salesperson. However, employing empathy in the workplace and having some positive communication skills can take you a long way in this type of position, since collaboration is key.

Be mindful of your mission and ethical ideals in relation to the company’s policies. Being able to cipher a bad deal from a good one is your main function, be sure to assess situations with caution.

What is the average salary for an underwriter?

Many underwriters make money off commissions, spreads, premiums, or interest. The average base salary currently reported for this position in the United States is $78,598 per year.

What is the typical career path for an underwriter?

Those who begin their underwriting journey early will want to try for an internship in their preferred career field. This can help them with contacts when it is time to land a position as an underwriting assistant or trainee. Depending on the firm or company, you can train with senior underwriters while finishing your initial certification processes.

From the training level, the next step is often assistant underwriter, followed by an underwriter. However, your company or position could have many levels of senior and managerial underwriters. Typically, this is how the position progresses as you build up your experience and gain contacts within the industry. People who move into this career from elsewhere often start in finance to some degree, in positions as budget analysts, actuaries, cost estimators, sales agents, claims adjusters, and more.

Step into your new role as an underwriter, now.