Job Profile: Insurance Underwriter

Health insurance is coverage that protects patients from financial loss when needing medical treatment for an illness or injury. Being insured is vital because medical bills can easily bankrupt you. According to Forbes, cancer patients pay a mean $49,000 and having a stroke costs $61,000 on average. Thanks to Obamacare, the United States’ uninsured rate reached a record low in September 2016 at 8.6 percent. Insurance underwriters play a prominent role in helping more patients receive the policies they need. Medical underwriting is a complex task where factors like health condition, age, employment, location, and family history are considered to determine whether insurance should be provided. Health insurance underwriters closely analyze applicants’ data to measure the risk involved with acceptance. They strive to keep insurance companies profitable by recommending the right coverage levels and premium prices.

Salary

The Bureau of Labor Statistics reports that the 89,960 insurance underwriters employed nationwide earn a mean annual wage of $72,650, which equals $34.93 per hour. Underwriters working for health insurance carriers make slightly less at $71,840 on average, but those hired by ambulatory care centers earn more at $74,310. The highest paid insurance underwriters work at securities brokerages with an average salary of $94,730.

Beginning Salary

Joining the health insurance niche as a young underwriter will typically garner a starting yearly income around $38,960. However, insurance underwriters with extensive experience can eventually break the six-figure mark to make $116,600 or higher annually. Underwriters could climb the management ladder to become Chief Risk Officers (CRO) where the median salary is $164,700!

Key Responsibilities

Insurance underwriters have the primary responsibility of examining a person’s medical information to ascertain how risky their coverage would be. They’ll dig into the potential policyholder’s healthcare history and lifestyle to conduct actuarial analysis. Underwriters determine the right premium, exclusions, or limits to balance risks and protect the insurer from financial losses. Insurance underwriters dial into cutting-edge software programs to easily calculate risk based on various criteria. When screening applicants, they might have to contact physicians or other clinical personnel to verify records. Insurance underwriters are lending decision-makers who have the final say if issuing the policy is the company’s best interest.

Necessary Skills

Success in medical underwriting jobs will require several sharpened skill sets. Insurance underwriters need strong analytical skills to piece together valuable information from various sources and pinpoint potential risks. Mathematical ability is important since underwriters need to determine loss probability and suitable premiums. Reading comprehension skills are a must to fully grasp meaning from complex medical documents. Insurance underwriters also need verbal communication skills to interview applicants and convey their recommendations to managers. Being detail-oriented is vital because every item on an insurance application matters. Underwriters should have good decision-making skills to pick correctly after weighing costs and benefits. Insurance underwriters need time management, writing, listening, and problem-solving skills too.

Degree and Education Requirements

Required education can vary greatly by insurance carrier, but most prefer hiring underwriters with at least a bachelor’s degree. Insurance underwriters should begin by majoring in finance, accounting, statistics, actuarial science, or mathematics. Select universities have bachelor’s programs in risk management and insurance, which would be ideal. Attending graduate school is often necessary for unlocking underwriter manager positions though. Going the Master of Business Administration (MBA) route is popular for management expertise. Nonetheless, a Master of Health Administration (MHA) or similar degree in health finance could be most beneficial for the medical insurance industry.

Pros and Cons of the Position

Let’s practice considering the rewards and risks to determine whether medical underwriting is your ideal career. On the positive side, insurance underwriters receive comfortable salaries and good benefits that could grow infinitely. There’s plentiful room for advancement into upper-level management and executive positions. Health insurance underwriters can utilize their clinical knowledge to review medical records rather than make them. They benefit from a pleasant office environment where computers make assessments faster. When jobs are cut, underwriters could switch to other insurance specialties like mortgage, life, or automobile. On the other hand, insurance underwriters are faced with declining jobs even in the growing health sector. Working sedentarily at a desk reviewing endless applications can become monotonous. Underwriters could feel above-average stress to steer clear of risks as emphasis on profit grows. Employers also expect underwriting certifications, which can be costly to maintain.

Getting Started

Beating out heated competition for underwriting positions will require an impressive resume. It’s best for beginning underwriters to complete internships and cooperatives during their schooling. Interns can work under an elder underwriters’ supervision to start learning the application review process. Entry-level trainees are often given the most basic applications dealing with common health risk factors. As your experience grows, you’ll become more independent and trusted with complex applicants. Once you have two to three years, consider applying for professional certifications. The American College currently offers the Registered Health Underwriter (RHU) credential. Achieving this designation will require mastering benefits laws like HIPAA and passing three closed-book examinations. The National Association of Health Underwriters (NAHU) also provides a Patient Protection and Affordable Care Act (PPACA) certification course. Insurance underwriters could eventually springboard into the health underwriting manager and director of underwriting positions.

Future Outlook

Since the Affordable Care Act was signed into law, the uninsured rate has dropped nearly 15 percent. The health insurance marketplace is exploding with policies to accommodate families and businesses needing to avoid tax penalties. Advanced technology has made much of the medical underwriting process automated though. Software is eliminating some underwriters’ jobs by processing applications. The BLS predicts that employment of insurance underwriters will decline by 11 percent by 2024, thus scraping around 11,700 jobs. However, don’t give up hope because underwriters still need to evaluate computer-generated policy recommendations. Insurance underwriters in healthcare could find prospects with direct carriers, agencies, securities brokerages, hospitals, and ambulatory care centers.

Overall, health insurance carriers rely on underwriters to carefully investigate new or returning applicants and determine the likelihood of their claiming excessive healthcare costs. Software systems have made it easier for underwriters to rate insurance applications based on risk. CNN Money ranked underwriting manager as America’s 99th best job with an “A” for personal satisfaction. Becoming an insurance underwriter could be perfect for analytical individuals who enjoy considering multiple variables for risk management.

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