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Underwriting


The process of evaluating (by an underwriter) the risk that an insurer would be exposed to in connection with a potential insurance buyer (particularly, the risks involved in insuring people and assets). This includes classification, selection and rating of the risks involved. The selection process involves evaluating information and resources to determine how a potential insured will be classified in terms of risk exposure. The insurance policy is then rated in terms of the premium that an insured will pay over the term of the insurance contract.

Professional underwriters review the criteria in an application to determine if it would “feasible” to issue a policy and, if so, how much coverage an applicant would be eligible for.

Underwriting completes with the issuance of a binder or policy to the insured by the insurance agent (also known as a producer).



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Insurance revolves around risk reduction or mitigation through transferring the risks of individuals and firms to an insurance company. Insurers take on the risk and ...
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