Comparing Insurance Brokers to Insurance Underwriters
There are many different insurance industry careers, but two of the most common are insurance brokers and insurance underwriters. While both of these jobs are involved in determining a client's coverage, they each have a different role in that process. Below are some of the main similarities and differences between these two careers.
|Job Title||Education Requirements||Median Salary (2021)*||Job Growth (2020-2030)*|
|Insurance Broker||High School Diploma or equivalent||$49,840 (for all insurance sales agents)||7% (for all insurance sales agents)|
|Insurance Underwriter||Bachelor's Degree||$76,390||-2%|
Source: *U.S. Bureau of Labor Statistics
Responsibilities of Insurance Brokers vs. Insurance Underwriters
Insurance brokers and insurance underwriters may work in the same industry and serve many of the same customers, but their primary duties are very different. Both of these jobs are involved in helping people access various types of insurance coverage, however, insurance brokers work directly with clients to help find policies that meet their needs, while insurance underwriters decide the specific terms and costs associated with those policies. Insurance brokers can represent one company exclusively or may serve as independent representatives of a wide range of companies, offering products and services to their clients. Insurance underwriters work for an insurance company and make decisions regarding coverage amounts and premiums within predetermined company guidelines.
An insurance broker is essentially a point of contact between insurance companies and the customers they serve. Insurance brokers are chiefly responsible for meeting with clients to determine their insurance needs and to help match them with the right product or policy. Some insurance brokers work for a single company, providing clients with a range of services exclusive to that provider, while other insurance brokers are independent agents, meaning they represent a variety of different insurance companies and are able to offer clients a broader range of products. It is essential for insurance brokers to have good customer service and communication skills, as the bulk of their business involves direct contact with clients, answering questions, addressing concerns, and networking for new customer leads.
Job responsibilities of an insurance broker include:
- Communicating online, in-person, or over the phone with new and existing clients to discuss their insurance needs, budget, and other factors
- Providing accurate quotes for coverage amounts and premiums
- Performing certain administrative tasks such as providing certificates of insurance, making policy changes, maintaining accurate records, and processing policy cancellations and renewals
- Comparing available coverage to ensure clients receive the best value and making recommendations when necessary
Insurance underwriters work for insurance companies. Their job involves reviewing applications for insurance and determining how much coverage the company can offer the client and at what cost. Underwriters use computer software to calculate client risk, pulling specific information from a client's application and entering it into the program; the software then recommends coverage amounts and premiums. Though much of the work is done by computer, insurance underwriters are still responsible for evaluating the software program results and making a final decision about coverage, and must strive to strike a balance between potential risks and benefits for the insurance company.
Job responsibilities for insurance underwriters:
- Analyzing information on insurance applications and making coverage decisions
- Contacting insurance agents, medical professionals, financial institutions, and others to investigate potential risk factors included in a client's application
- Adhering to company policies regarding applicants, allowable risks, and appropriate coverages
- Communicating with insurance agents, brokers, and company personnel regarding coverage decisions
Those interested in the customer service aspect of a job as an insurance broker may want to consider a career as a financial planner, a professional who helps match clients with the right investments and banking services to meet their needs. If a job as an insurance underwriter sounds appealing, you may want to think about a career as an actuary, where you can analyze the financial impact of risk events like injury or disability.