by Leonard Konis

Created on: December 10, 2006   Last Updated: April 17, 2007

The strength of an insurance company is greatly determined, by the insurance underwriter that analyzes the risk, and rewards for evaluating the profit or potential loss for the insurance company, to offer an insurance policy, and determine premium amount. The work of the underwriter is often assisted by a computer software program "smart system," that evaluates incoming data, which includes applicant's information, medical reports, actuarial studies, and any other relevant data. Also, computer linked to various databases, such as obtaining driving records, and property values. Concludes whether to accept or deny the insurance policy, determine appropriate premiums, lower the requested applicant's insurance policy amount or attach endorsements, and limit the insurance company's liability. If the underwriter is to conservative in their opinion, the company may loose business to competitors or pay excessive claims, if the underwriter underestimated the actual loss.

The insurance underwriter reports to the insurance agent results of the analysis, and may accompany the insurance agent during the presentation to a prospective client. Underwriter specializes in one of three insurance categories: Life, health, or property and casualty. A sub category of life and health insurance underwriter, specialize in a group or individual polices. Other specialties include: Underwriters for boats, aviation, transportation, teachers, and more. Health insurance underwriters would investigate the applicant's medical history, occupation, and study actuarial tables, which provide statistical probabilities. However, according to Health Insurance Portability and Accountability Act (HIPAA) of 1966, prohibit the use of genetic information, to deny any group of insurance coverage, when workers switch from one job to another or charging higher premiums. Property and liability underwriters evaluate physical condition of the property, protective devices, safety procedures, and review safety inspection reports, and credit report of the applicant. During renewal process, any previous policyholders claims would be examined, and may revise the premium amount. Group underwriter analyzes the overall composition of a group to ensure the total risk is not excessive, to an insurance company. Group policy may include labor union membership coverage for automobiles or health insurance. Rates maybe set according to a published standardized classification or according to the individual or group risk variations.

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