Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
50% - Moderately

Underwriting Risk

Synonyms:financial risk, insurance loss risk, insurance risk
Filed Under: financial-banking, insurance, investments, mortgages
Tags: banking, insurance, investment, mortgage

Definition of underwriting risk

underwriting risk
1. A measure of how much risk of loss an underwriter takes on from underwriting activities. In addition to an underwriter's erroneous assessment of risk, in the insurance industry, underwriting risk can occur due to factors completely out of the underwriters control. With securities, underwriting risk usually arises from market instability, or overestimation of demand for a product.

Related Terms and Acronyms:

  • insurance cycle   A cycle of soft and hard market conditions observed in the insurance and underwriting industry.
  • insurance score   A score used by those in the insurance industry to determine how likely a claim will need to be paid out for an individual or entity.
  • Lloyd's of London   A market for insurance and reinsurance based in London, England where Lloyd's members, underwriters and financial backers can spread and share risk.
  • loss control   The combined efforts undertaken by both the insurer and the insured to lower the risk, frequency and extent of potential losses.
  • mortality and expense risk charge   A charge sometimes applied to reimburse an insurer for the risks in a policy.
  • premiums written   A sum of the premiums from all the policies that a company has written in a given period of time.
  • underwriting (UW)   Assessing individuals for eligibility and issuing and distributing a financial product such as insurance, equity capital or credit.
  • underwriting guide   The rules and guidelines an underwriter must follow while writing policies.

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