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Computer programs serve an essential role in the insurance industry in a number of areas. Underwriters rely on complicated algorithms to determine risk, prices are determined by sophisticated programs that take information and translate it into quotes and compliance and reporting regulations are prepared using data from insurance software models.
To Make Risk Assessments
Before insurance policies are issued, an insurance company assesses the risk of the applicant by using various algorithms to determine how likely that applicant is to file a claim. The higher the risk, the more they charge for the policy. Underwriting also may lead to application denials. Underwriters rely on computer programs into which they input a slew of information. The computer then analyzes the data and provides a risk assessment. Underwriters usually learn specific computer programs related to property and casualty, life and health insurance.
To Attract and Retain Customers
Like most industries, insurance companies look to mobile computer applications, social media outlets and do-it-yourself online products to attract and retain customers who demand more access. According to CSC, a global next-generation technology provider, insurance companies can reach customers by taking advantage of new technology as it progresses and move away from the traditional Legacy systems that have dominated traditional insurance computer practices. A few examples of applications consumers want include the ability to file claims through mobile apps, ample online information to make buying decisions without having to talk to an agent and shared reviews and ratings of insurance companies.
To Pay or Deny Claims
Insurance claims examiners rely on computers to review insurance claims, doctor’s reports, investigative notes and actual insurance policies to determine whether the company will pay a claim or demy its merit. Most of the information is relayed online, through document-sharing programs and computerized copies of the policies. For example, if someone dies under suspicious circumstances, a claims adjuster would review the autopsy reports, the insurance company’s own investigator notes and the insured’s policy to make a final determination.
To Stay Abreast of Regulations and Rules
Information is passed from federal government agencies and state insurance commissioners electronically to insurers who rely on up-to-date, real-time reports on changes that affect their industry. Insurers rely on effective websites and email alerts from associations such as the National Association of Insurance Commissioners (NAIC) that serve members by staying abreast of changes and distilling the information in electronic reports on a regular basis. Federal and state insurance regulators provide access through online sites for insurers to follow the rules and regulations of their agencies. For example, insurers can access a catalogue created each year by the NAIC to find important updates on changes to laws affecting life, health, home and auto insurance.
2016 Salary Information for Insurance Underwriters
Insurance underwriters earned a median annual salary of $67,680 in 2016, according to the U.S. Bureau of Labor Statistics. On the low end, insurance underwriters earned a 25th percentile salary of $51,290, meaning 75 percent earned more than this amount. The 75th percentile salary is $91,780, meaning 25 percent earn more. In 2016, 104,100 people were employed in the U.S. as insurance underwriters.
- Practical: Insurance
- U.S. Bureau of Labor Statistics: What Insurance Underwriters Do
- U.S. Bureau of Labor Statistics: What Claims Adjusters, Appraisers, Examiners, and Investigators Do
- National Association of Insurance Commissioners: Special Studies
- U.S. Department of Treasury: Federal Insurance Office
- U.S. Bureau of Labor Statistics: Occupational Outlook Handbook: Insurance Underwriters
- Career Trend: Insurance Underwriters
Linda Ray is an award-winning journalist with more than 20 years reporting experience. She's covered business for newspapers and magazines, including the "Greenville News," "Success Magazine" and "American City Business Journals." Ray holds a journalism degree and teaches writing, career development and an FDIC course called "Money Smart."