What does "underwriting" involve?

Underwriting involves determining the level of risk associated with insuring a person, entity, or property. This process is crucial because it allows insurance companies to assess whether they will accept the risk of providing coverage and under what terms. Underwriters analyze various factors such as the applicant's history, health, property conditions, and other relevant data to make informed decisions. This risk assessment informs the overall management of the insurance portfolio and helps in establishing appropriate coverage options.

While creating insurance policies, setting premium rates, and evaluating claims are all part of the broader insurance process, they generally follow the underwriting phase. Underwriting acts as the foundation that guides many of these subsequent activities.