What is Underwriting in Insurance?

Underwriting for insurance is when an individual or institution takes on a financial risk for another individual or institution for a fee. Originally, individuals taking on a risk were required to write their name under the amount of risk they were taking on.

Underwriting is an important piece in the financial world. It requires thorough research and accurate calculations. 

What is an Insurance Underwriter?

An insurance underwriter evaluates the risk of insuring individuals, businesses and assets. Then they establish pricing for insuring those risks. It is important that the underwriter knows how much risk they can take on and what is a fair fee (usually a monthly premium) to charge the insured. Underwriters weigh the size of the risk and likelihood of a claim and compare it to the premiums they expect to collect.

Related Terms


Lloyd’s of London



Syndicate List

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