What Is Insurance Underwriting?

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What Is Insurance Underwriting?
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Definition

• Definition Insurance underwriting is the process
  of choosing who and what the insurance company
  decides to insure.
• This is based on a risk assessment.
• It is pretty much the "behind the scenes" work in
  an insurance company where they determine who is
  insured and how much in insurance premiums they
  will charge the insured person.
• Insurance underwriting also involves choosing who
  the insurance company will not insure.

Source http//personalinsure.about.com/od/insuran
cetermsglossary/g/underwriting.htm
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Underwriting Cycle

• Tendency of property and liability insurance
  premiums, insurers' profits, and availability of
  coverage to rise and fall with some regularity
  over time.

How Many More Quarters of Profits on the Way?
Source http//www.answers.com/topic/underwriting-
cycle
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Underwriting Cycle

• A cycle can be said to begin when insurers
  tighten their underwriting standards and sharply
  raise premiums after a period of severe under
  writing losses.

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Underwriting Cycle

• Stricter standards and higher premium rates often
  bring dramatic increases in profits, attracting
  more capital to the insurance industry and
  raising underwriting capacity.
• On the other hand, as insurers strive to write
  more premiums at higher levels of profitability,
  premium rates may be driven down and underwriting
  standards relaxed in the competition for new
  business.

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Underwriting Cycle

• Profits may erode and then turn into losses if
  more tax underwriting standards generate mounting
  claims. The stage would then be set for the cycle
  to begin again.