Whats an underwriter?

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PostPosted: Fri Dec 14, 2007 4:14 am   Post subject: Whats an underwriter?  

Whats an underwriter? Some information thing?



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PostPosted: Fri Dec 14, 2007 6:48 am   Post subject:   

Underwriters enjoy a very important position in the insurance industry. The job of an underwriter is to meter the amount of risk involved in writing a policy.



Whenever, you apply for an insurance policy the insurer before issuing the policy to you will send it to the underwriter. The underwriter will then evaluate the risk involved in offering you the coverage and upon that will also decide about the premium that you will be asked to pay.



Now, what does underwriting mean ?… You should know that first!



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PostPosted: Fri Dec 14, 2007 7:10 am   Post subject:   

Hi quenlin, underwriting involves managing, processing and analyzing data. Therefore, the underwriters are looked upon as the decision makers of the insurance business.



To run an insurance business successfully, the insurer needs to receive the constant support of its underwriters in terms to successful assessment of the risks. Wrong decisions and weak underwriting process can even eliminate a company from the business altogether. Therefore, underwriting is considered as a very rewarding carrier too.

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PostPosted: Fri Dec 14, 2007 7:30 am   Post subject:   

Yeah guyz, you all are right in describing the duty of an underwriter. But I would like to add some points to it from my side.



An underwriter should be a person with a sound knowledge of statistics and economics. Understanding of the insurance business is also important for an underwriter. The job of the underwriter also involves designing policies as well as the premium structure. They are required to monitor the market trends and may need to incorporate those, time to time, in the company policy, as well.



Hope this info will help you to build a better understanding about the job of an underwriter. Enjoy your stay at ampminsure. Thanks,



Brian

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PostPosted: Fri Dec 14, 2007 7:55 am   Post subject:   

So an underwriter is someone that keeps the insurance company from giving a huge premium to someone that often participates in dangerous sports like skydiving and boxing?



Thanks for welcoming me Brian, I'm getting a lot of welcomes today. Shame I don't get this many welcomes on other forums I go to, makes me feel appreciated.



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PostPosted: Fri Dec 14, 2007 9:47 am   Post subject:   

good morning Quenlin and welcome to the community...



You've gotten some terrific answers to your question.



A laymens way of understanding an underwriters main duty would be. They are the people that decide if the company wants to insure the prospect. Or if the company is willing to accept the/that risk, and if so for how much. So yeah, your analogy is kind of right...they would decide if the skydivers risk was too high for their company to insure. I'm not real sure what you mean by this though

Quote:
that keeps the insurance company from giving a huge premium to someone
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PostPosted: Fri Dec 14, 2007 5:37 pm   Post subject:   

Hello Quenlin, welcome to the forum (you must be sick of that by now).



Based on your quote "You're only young once, but you can be immature forever." I'm going to take a little chance here.



An underwriter does his/her best to gather as much information as they can and use this in order to determine if insuring someone will be a risk to their insurance company. And if so, how much risk will be involved. You can surely appreciate why someone with 3 DUIs would present a greater element of risk to an insurance company than someone who only drives back and forth to church.



If you promised someone's wife a huge check when their husband died, would your chances of hanging on to your money be better if the husband was a stay-at-home dad who sold Amway in the evenings from the comfort of his own living room or the husband whose business it is to fit meth labs into small apartments?



Underwriters determine risk. Once a determination is made, each case (or person) is given a risk factor, or in life insurance, a table rating. The higher the rating or the factor, the higher the premium.



Let's say, God forbid, you're leaving a party after having maybe one more beer than you should have. Because your designated driver is blasted as well you are forced to drive home. Do you go through the middle of town where any error you make will be immediately evident or do you take back roads, canal banks, behind shopping malls, and dimly lit streets?

That's an assessment of risk in its simplest form.



I'm sorry Brian but all underwriters don't necessarily have to have a sound understanding of anything but how to follow directions. I've known underwriters who couldn't spell statistics or economics and thank God for spellcheckers.



Things like policy design and premium structure are usually left to the actuaries. These are the guys who usually don't need spell checkers.



The monitoring of the market and market trends is usually left to those creative people in a company's marketing department. These are the guys who couldn't sell products very well but have a very impressive understanding of the product lines, who needs them, and what it would take to sell them. Who knows what will sell better than someone with field underwriting experience?



Welcome aboard,

Mark



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PostPosted: Sat Dec 15, 2007 12:11 am   Post subject:   

Yeah, I got it, thanks for the info, all of you.



And Lori, I used the wrong term, I meant; It stops the company promising a huge payout to someone that would have a high chance of claiming it in a short time.



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PostPosted: Sat Dec 15, 2007 3:40 pm   Post subject:   

Quote:
And Lori, I used the wrong term, I meant; It stops the company promising a huge payout to someone that would have a high chance of claiming it in a short time.
There that makes more sense, you are totally correct! Very Happy
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