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An underwriting analyst evaluates both individuals and businesses to determine the degree of risk they present to lenders and insurers. Particularly for large or complex loans and insurance products, using an analyst can be critical to reduce risk and offer products appropriate to the needs of the customer. Work in this field may require a college degree as well as industry experience, depending on the employer. It can also help to belong to a professional organization that provides career development opportunities.
When clients approach a lender or insurance firm, the underwriting analyst can undertake research to determine the degree of risk presented. This includes looking over financial statements, requesting credit history, and evaluating other personal factors. In addition, the overall market can be considered. A manufacturer looking for a loan to initiate development of a new product might be a poor risk if the industry is struggling, for example, because it might not be able to pay off the loan. All these issues must be weighed when making decisions about which products the client might be eligible for.
This may result in a complete and detailed report with recommendations. The underwriting analyst can discuss the level of risk and provide some comparisons for the benefit of those reviewing the report. Recommendations, including the type of insurance or loan to offer and the terms, are typically included. Underwriting analysts can consider a variety of factors when advising personnel on whether to proceed with an offer of services.
A thorough understanding of statistics, risk management, and actuarial processes can be useful for an underwriting analyst. It is necessary to consider the individual profile of a person or company applying for a loan or insurance coverage along with market conditions and industry standards. Regulatory compliance can be a concern as well, such as stipulations limiting loans on the basis of annual income. Standards periodically change, making it important to keep up with industry practices to provide the best services to employers.
Someone preparing to become an underwriting analyst may get a degree in math, business, or accounting. This can be followed with several years in underwriting departments to get direct experience and knowledge of the industry. Senior positions usually require at least two years of experience and a degree. Employers may have continuing education expectations for their personnel. Some may provide assistance with the costs for conference attendance, subscribing to professional publications, and related career development activities.
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