WELCOME

TOPIC – INSURANCE
UNDERWRITER
A project submitted to
University Of Mumbai for partial completion of the
degree of
Bachelor of Commerce (Accounting and Finance)
Under the faculty of Commerce
By
Hanbar Shubham Anandrao
Under the Guidance of
Prof. Shravani Mandalkar mam
Changu kana Thakur Art’s, Commerce and Science
College, Sector- 11, New Panvel
 CONTENTS
 Introduction

 Definition

 Functions of underwriters

 Types of underwriters

 Conclusion

 Reference
 INTRODUCTION

• Insurance underwriters evaluate the risks involved in insuring people and assets and
establish pricing for a risk.

• Underwriters in investment banking guarantee a minimum share price for a company

planning an IPO (initial public offering).

• Commercial banking underwriters assess the risk of lending to individuals or lenders

and charge interest to cover the cost of assuming that risk.
 DEFINITION

Underwriting is the process insurers use to determine the risks of insuring your small
business. It involves the insurance company determining whether your firm poses an
acceptable risk and, if it does, calculating a fair price for your coverage.
 FUNCTIONS OF
UNDERWRITERS
1. RISK SELECTION:
In this step the underwriter decides whether or not to accept a particular risk. It involves securing
factual information from the applicant, evaluating that information, and deciding on a course of
action.

2. CLASSIFICATION AND RATING:

Once the risk has been accepted, the underwriter then classifies and rates the policy. Several tentative
classifications are usually assigned before a final decision on classifying the risk is reached

3. POLICY FORMS:
After determining the acceptability of an applicant and assigning the proper classification and rating,
the underwriter is ready to issue an insurance policy.
 TYPES OF
UNDERWRITERS
There are basically three different types of underwriting: loans, insurance, and securities.

1. Loan underwriter:
Loan underwriting involves evaluating and calculating the risks of lending to potential borrowers.
Loan underwriters make the assessment of loan repayment based on four main factors: income,
appraisal, credit score and asset information.

2. Insurance underwriter:
Insurance underwriting is the process of evaluating a prospective insurance candidate for life,
health and wellness, property and rental or other types of insurance.
3. Securities underwriting:
Investors and investment banks use securities underwriting to determine how profitable
investments—such as individual stocks and debt securities—are likely to be.

4. Forensic underwriting:
Forensic underwriting occurs when a borrower fails to pay back a loan. In this case, the borrower
will be assessed again to determine whether the person can be given a new loan or a refinance.
 CONCLUSION

• Underwriting is the process through which an individual or institution takes on financial risk for
a fee.

• This risk most typically involves loans, insurance, or investments.

• The term underwriter originated from the practice of having each risk-taker write their name
under the total amount of risk they were willing to accept for a specified premium.
 REFERENCE

• www.Wikipedia.com

• www.accountlearning.com

• www.investopedia.com