WHAT DOES UNDERWRITING MEAN? - ProProfs Discuss
Advertisement

What does underwriting mean?



Asked by Mia, Last updated: Nov 18, 2021

+ Answer
Request
Question menu
Vote up Vote down

1 Answer

John Smith

John Smith

John Smith
John Smith

Answered Sep 08, 2016

The term underwriting means to assume the risk of something. in the securitiesindustry, underwriting means to agree to buy, for example, stock from an issuer thathas not yet been sold to the public (i.e., to take on the risk of buying and then resellingthe shares to the public). in the insurance industry, underwriting means to insuresomeone against losses (i.e., you take on the risk of collecting premiums in exchangefor making payment if the insured suffers a loss). the business of underwriting in theinsurance industry is a very complicated process of examining as many facets of riskas possible and trying to determine what premiums would be acceptable to theinsurance company in exchange for payment if a loss should occur.some people act as independent brokers or agents in the insurance industry. theysell you insurance but the underwriting (the assumed risk) is actually done by anotherinsurance firm. independent brokers can often offer you a better price since they canrepresent a variety of underwriters versus those agents that work for one insurancecompany alone.
upvote downvote
Reply 

Advertisement
Advertisement
Search for Google images Google Image Icon
Select a recommended image
Upload from your computer Loader
Image Preview
Search for Google images Google Image Icon
Select a recommended image
Upload from your computer Loader
Image Preview
Search for Google images Google Image Icon
Select a recommended image
Upload from your computer Loader

Email Sent
We have sent an email to your address "" with instructions to reset your password.