Insurance Sales Agents and Underwriters
Insurance sales agents help consumers choose insurance policies that protect them from financial losses in the case of damaging events. Underwriters examine insurance applications and decide whether they should be accepted, as well as calculate policyholders' risk of loss, determine premiums, and write policies to cover risks.
A bachelor's degree is typically required of agents and underwriters. While no specific major is required, majoring in business, economics, or finance may be your best bet if you want to succeed in the insurance industry. You also might want to obtain some real-world experience during or after completing your education to familiarize yourself with the field and prepare for a career. An internship or relevant work experience can give prospective insurance sales agents an advantage, though it is typically not required to earn a license. Underwriters commonly participate in job shadowing and on-the-job training to gain experience before they begin working independently.
A designation provides a solid foundation in a changing industry.
Susan KearneySenior Director of Knowledge Resources for the American Institute for Chartered Property and Casualty Underwriters
Getting an Insurance Sales Licensure and Underwriter Certification
Licensure and certification help state insurance departments and professional organizations regulate professionals in this industry. Insurance sales agents are required to earn licensure in their state. Additionally, they may be required to earn separate licenses if they plan on selling life and health insurance and property and casualty insurance. To obtain licensure, agents generally must meet certain requirements set by the state insurance department, which typically include the completion of pre-licensing courses and passing of a state-administered examination.
Initial education and training is important for prospective insurance sales agents, said Skyla Badger, the marketing manager for The National Alliance for Insurance Education & Research. "Proper practice requires first a comprehensive and objective education," she said. "Knowledge is power, and it should be a primary concern to consumers." While prospective agents can fulfill these requirements independently, some insurance providers may offer internships during which agents in training must undergo the licensing process. Agents working directly for insurance providers may also have to take a company-administered exam before they can begin working.
Rather than being licensed, underwriters who desire to advance can be certified in specialized areas. As most training takes place on the job through work-study training programs, they are not required to hold a formal designation before obtaining an entry-level underwriting position. Referred to as underwriter trainees or assistant underwriters, these beginners work under the supervision of experienced insurance professionals, learning about types of losses, how to evaluate applications, and the ins and outs of claims files. There are several designations that underwriters can seek if they wish to advance in their career. The Insurance Institute of America offers the following designations: Associate in Commercial Underwriting (ACU), Associate in Personal Insurance (API), and the Chartered Property Casualty Underwriter (CPCU). The American College offers the designations of Chartered Life Underwriter (CLU) and Registered Health Underwriter (RHU). These types of designations can be earned through completing certification programs that commonly involve passing a series of courses and tests, which can take from one to two years.
Even though a professional designation is not required of an underwriter, the credential may help set them apart over other job candidates and help in obtaining new clients, according to Susan Kearney, senior director of knowledge resources for the American Institute for Chartered Property and Casualty Underwriters. "A designation provides a solid foundation in a changing industry," she said. "It also demonstrates a commitment to the profession, enhances professional image and credibility, reflects achievement, builds self-esteem, establishes professional credentials, improves career opportunities and advancement, prepares the underwriter for greater job responsibilities, provides for greater earning potential, improves knowledge, and provides greater professional recognition from your peers."
Maintaining Insurance Sales Agent Licensure and Underwriter Certification
As the insurance industry is ever-changing, professionals are required to stay up to date if they want to keep their licenses and certifications. To maintain insurance sales agent licensure, most state insurance departments require agents to meet continuing education requirements every two years. Continuing education helps agents stay current on insurance laws, policies, ethics, and consumer protection.
There is no substitute of up-to-the minute, state-specific, quality education.
Skyla BadgerMarketing Manager for Insurance Education & Research
Continuing education requirements are necessary as sales agents need more than initial knowledge to advance in the insurance field, according to Badger. "An additional commitment is required to keep that education up to date because of the frequency of form changes, policies, risks and exposures," she said. "The primary way that an agent advances in his/her career is through serving the needs of their clients. There is no substitute of up-to-the minute, state-specific, quality education. Clients have the ability to sense the confidence and competence of their agents. Each new client or referral increases the agent's book of business and advances them in their career."
There are various professional insurance organizations that offer continuing education courses for sales agents. However, before enrolling, consult your state insurance department to make sure the courses are approved for credit.
The constant shape-shifting of the insurance industry also keeps underwriters on their toes. They face considerable challenges to make sound decisions on accounts which are vital to maintaining an insurer's overall profitability, said Kearney. "Insurers are constantly changing and updating assessing new risks and offering policies to meet a world of ever-changing circumstances," she said. "In this type of environment, maintaining a competitive edge requires an underwriter to have superior knowledge of risks. Continuing education is required to stay current with changing risks, issues, and major trends or events in order to make sound underwriting decisions."
Experienced underwriters who wish to retain their formal designations will likely be required to periodically meet continuing education requirements through the organization in which they are certified. According to Kearney, this type of continuing education is an integral part of any underwriting position and is essential for sustained employment and career advancement. "In order to continue to advance in their careers, it is necessary for the underwriter to gain more knowledge as they will move on either to accounts that are more complex or into managerial or supervisory roles," she said. "Continuing education becomes a necessity to be able to keep abreast, for example, of emerging or changing risks, industry trends, or state and federal laws and regulations."
Many organizations offer continuing education courses both online and in the classroom. Online classes allow insurance professionals flexibility to fulfill their licensing and certification requirements around their busy work schedules. Badger believes that online courses, such as those offered by The National Alliance for Insurance Education and Research, are beneficial to agents in many ways. "Provided that quality standards stay high, and instructor input is available and attentive, online education is every bit as valuable as classroom or onsite education, and for some learning styles, actually better," she said. "In today’s economy, the savings in travel, lodging, and meals can be significant. Since online courses can be taken from home or office, there is a substantial savings of time as well."