Full Definition
Underwriting is the process by which insurance companies evaluate, select, and price risk. Underwriters analyze applications, loss history, financial statements, and risk characteristics to determine whether to accept a risk, what terms and conditions to apply, and what premium to charge. In property/casualty insurance, underwriters evaluate industry class, revenue/payroll, claims history, and risk management practices. In life insurance, underwriters evaluate health history, medical exams, lifestyle factors, and financial justification for the coverage amount. The underwriting process can range from minutes (for simplified issue products) to months (for complex commercial or high-amount life applications).
Explore More