what is an underwriter?
As an underwriter, you 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 when determining the applicant's ability to repay the loan. If an applicant works full-time in a thriving company and has a stable income, they are likely a low-risk borrower.
In addition to evaluating loan applications, you assess risks related to other business decisions. For instance, you evaluate the potential risks and benefits when a company plans to go public. As an underwriter, you may specialize in specific areas such as mortgage, insurance, or business underwriting. To provide expert services, you need specialized knowledge in your industry.
Your job as an underwriter is complex since you assess the risks of financial and business decisions. When evaluating the level of risk, you conduct research and analyze the available data to make decisions. Hence, you require good research and analytical skills to excel in the role. Decision-making skills also help you weigh every decision and protect the business from risks.
Would working as an underwriter suit your analytical and decision-making skills? Then read on to find out what competencies and qualifications you need to thrive in an underwriter role.
underwriter jobsaverage underwriter salary
According to Job Bank, underwriters take home a salary of $100,674 per year. When starting your career, you are likely to earn $81,624 annually. The most experienced underwriters get earnings of $103,465 yearly.
what factors affect your salary as an underwriter?
As an underwriter, your salary varies based on your industry. For instance, an equity underwriter earns a different salary from an insurance underwriter. Mortgage underwriters also receive different earnings since the roles are unique. Aside from your area of specialization, your earnings also depend on your qualifications and work experience. Entry-level underwriters take home a lower salary due to their minimal experience. On the other hand, underwriters with over five years of experience can negotiate a higher salary because of their expertise.
The size of the company you work for also influences your earnings. If you work for a small organization, your earning potential is limited by the company's resources. You receive a higher salary when employed by a large organization or a financial institution with unlimited resources.
types of underwriters
Some of the different types of underwriters include:
- equity underwriters: as an equity underwriter, you 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 assessing demand for the stock and analyzing the initial public offering value.
- 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 at a profit on behalf of the client.
working as an underwriter
Working as an underwriter requires good research and decision-making skills. Here are the duties, responsibilities and work environment of an underwriter:
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what does an underwriter do?
Some of the duties and responsibilities of underwriters include:
- reviewing applications: as an underwriter, you analyze and evaluate applications for financial services. You gather information to determine whether to approve or decline the loan applications. After reviewing an application, you approve it or decide if you need more information.
- calculating risk: as an underwriter, you collect statistical data to highlight the level of risks. If a borrower or a client applies for insurance coverage, you evaluate the risk presented by the insurance policy. You use the information and statistical formulas to determine the risk level.
- researching to evaluate an application: when evaluating an application, you conduct additional research. For instance, you check if the applicant is employed full-time before approving a loan or evaluate the driving experience of a car owner before awarding insurance coverage. Conducting research helps you weigh the risks associated with offering the product to the client.
- determining the available coverage: as an underwriter, you help the insurance company determine the coverage they can offer clients. You evaluate the risks associated with the policy and determine the premiums to be paid. You help dictate the terms attached to the policy, as well as the conditions your company is willing to fulfil by accepting the risk.
- reviewing existing client portfolios: as an underwriter, you ensure that the mortgage lender can afford to offer the loan and that the insurance company covers the risk insured.
- counselling clients on risk management solutions: as an underwriter, you assist businesses in making sound investment decisions. You negotiate the terms and contracts for selling or buying equities and securities.
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work environment of an underwriter
Underwriters typically work in an office setting. The role involves sitting for extended periods. You spend most of the day analyzing data on a computer. You also interact with insurance agents, both in person and over the phone. You only travel when attending business events or meetings. As an underwriter, you will likely work with insurance agencies, credit unions, banks and investment companies.
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who are your colleagues?
As an underwriter, you work with VPs of finance (large enterprise), financial analysts and finance advisors. Depending on the industry you work in, you are likely to work with insurance agents, accountants, data analysts and credit officers. You also collaborate with actuaries and business analysts F&A.
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underwriter work schedule
The typical work schedule of an underwriter in a full-time position is 35 to 40 hours a week. You work standard business hours, from 9 am to 5 pm. Occasionally, you work evenings and weekends to meet deadlines or attend important client meetings. Some underwriters only work part-time or have work-from-home arrangements, enabling them to review applications remotely.
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career opportunities as an underwriter
The employment outlook for underwriters in Canada is promising. You have numerous opportunities for career growth as an underwriter. You can pursue other careers, like becoming an insurance broker or agent. Some underwriters become actuaries, while others become financial advisors or financial analysts. With experience and qualifications, you can take up a managerial position in the company.
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advantages of finding a job as an underwriter through randstad
Working with Randstad offers you a range of benefits.
- always a contact person you can fall back on and ask for help from
- many training opportunities
- a range of jobs in your area
underwriter skills and education
If you want to become an underwriter, you require the following skills and educational qualifications:
- university degree: you require a computer science, statistics or business administration degree. You can also pursue a degree in economics, finance or accounting. Consider completing a graduate degree in business management. Find internships and training opportunities to acquire the necessary skills and experience to work as an underwriter.
- certification: while an underwriting certificate isn't mandatory when starting your career, it is useful when applying for senior roles. For example, you can acquire certification from the Insurance Institute of Canada. Individual provinces and territories also have various training courses. For instance, you can complete a certified residential underwriter certification course offered by Mortgage Professionals Canada.
competencies and characteristics of underwriters
Some of the qualities of an underwriter include:
- computer skills: as an underwriter, you perform complex statistical analysis, which requires knowledge of using computer software. Every industry has specific software programs for underwriters to use in statistical analysis. It helps to be proficient in spreadsheet software and have experience using 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 math. While the computation is done using computers, your math skills help you verify the accuracy of the computations and make informed decisions. Mathematical skills also help 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 excellent 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
Here, you will find the answers to the most frequently asked questions about the profession of an underwriter.
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what is the median salary of underwriters in Canada?
As an underwriter, your earnings fluctuate based on many factors. For instance, many employers consider your experience and qualifications when determining your salary. The average salary of an underwriter in Canada is $100,674 per year. That means you receive an average hourly rate of $51.63.
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what are the duties of an underwriter?
As an underwriter, you review and verify loan applications or analyze insurance applications. You check the applicant's documentation to determine their risk levels and ability to pay. When offering insurance products to clients, you define the terms and conditions of insurance coverage and establish the premium rates. When policies come up for renewal, you assess the risks and set new premiums.
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are underwriters in demand in Canada?
Underwriters are in high demand, particularly in financial institutions and insurance companies. Improving your qualifications helps you stand out in the competitive job market. You can specialize in one area of expertise and acquire the necessary professional certifications to gain a competitive edge.
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how do you become an insurance underwriter?
You require a bachelor’s degree in a relevant field to gain the knowledge necessary for becoming an underwriter. A degree in computer science and statistics prepares you for the role. However, consider a graduate degree in business administration or management. Additionally, pursue a certification from the Insurance Institute of Canada to become an accredited insurance underwriter.
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is being an underwriter a good career choice?
Working as an underwriter is a promising career with great opportunities for career growth. You also enjoy a good salary and have the potential to earn additional benefits as your experience improves.
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how do I find a job as an underwriter?
Finding a job near you as an underwriter is easy. Search our job offers. Then submit your application using the ‘Apply’ button top right on the page. No jobs available right now? Send us your resume and we'll pass it on to a recruiter who will contact you if an opportunity opens up for you.
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