The Difference Between a Claims Adjuster & an Underwriter

Claims adjusters and underwriters perform their work at different points in the insurance process. The underwriter, who determines the risk and cost of the policy, performs her job before insurance is approved and provided. To understand the relationship between claims and underwriting, consider that the claims adjuster comes in when the insurance company must decide whether to pay a claim. The two positions differ in other ways, including the skills and knowledge used, technology and employment.

What Claims Adjusters Do

Claims adjusters work in different types of insurance – including property, life and health – where they evaluate, investigate and determine the validity of insurance claims. Kaplan Financial says that adjusters review insurance policies, police reports and other official documents. They collect information, perform research, conduct inspections, collaborate with other insurance professionals, such as claims examiners and appraisers, and consult with attorneys, physicians and other experts. Claims adjusters negotiate claims settlements with the insured, authorize payments and defend contested settlements.

It helps to also understand the difference between a claim handler vs adjuster when considering this career. Claims handlers would help the customer process their initial claim and provide updates, while an adjuster has a wider role in examining the claim and authorizing the final payout.

What Underwriters Do

Underwriters review and analyze applications for insurance to determine the risk for the insurance company. Underwriters usually work in health, life, property or mortgage insurance, where they use established criteria to screen applicants. They review information such as medical or driving records and make recommendations about whether to provide insurance, the amount of coverage and the amount of premiums.

Underwriters, who use special underwriting software that performs calculations and makes recommendations based on the data entered, write insurance policies based on their findings. They work with insurance companies and insurance agents to control risk while generating profits through policy sales and premiums.

Education and Training Requirements

A high school diploma or GED is the usual minimum education requirement for claims adjusters. Many employers require insurance work experience, vocational training or a bachelor’s degree. Claims adjusters often receive workplace training under the supervision of an experienced adjuster. State requirements for claims adjuster licensing varies, with some requiring only public adjusters to obtain licenses. Employers prefer a bachelor’s degree for insurance underwriters, according to the U.S. Bureau of Labor Statistics.

Many companies accept underwriting work experience and a strong background in finance and computers. Employers often require certification for underwriters, who are expected to complete coursework to maintain current underwriting knowledge or to advance to higher underwriting positions.

Employers for Adjusters and Underwriting

When looking at the relationship between claims and underwriter in terms of common employers, you'll find that insurance carriers are the primary employer of both.

Claims adjusters work for insurance companies where they specialize in the type of insurance coverage the company provides. The federal government employs claims adjusters, and insurance companies hire self-employed claims adjusters when needed. Claimants sometimes hire self-employed claims adjusters, also called public adjusters, who provide independent analysis and settlement negotiations.

The BLS says that most insurance underwriters, about 55 percent, work for insurance carriers with smaller percentages working in brokerage firms and credit and business management companies.

Adjuster vs Underwriter Wages

Claims adjusters earned a median annual wage in 2020 of ​$68,270​, according to the BLS. The agency lists ​$41,950​ as the 2020 wages for the 10 percent of claims adjusters at the lowest end of the earning scale, with the top 10 percent earning more than ​$103,610​.

The 2020 median annual wage for insurance underwriters was ​$71,790​ according to the BLS, which lists the wages for the lowest 10 percent at ​$43,210​ and the top 10 percent as above ​$129,550​.