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What is Underwriting?
Underwriting is about studying risks and the probability of a risk or a risky event happening.
Underwriting can be done in investment as well as in insurance.
From the study of these risks the company underwriting these risks will then decide how much of those risks they (risk-takers, example insurers) are willing to absorb. Once they decide on the quantum of risks they want to take on they will promise the other party whom the risk has been underwritten that they will provide something in return if the risks do happen. And this usually comes in either a sum insured or a certain return on investment or a loan or mortgage.
Underwriting is about studying risks and the probability of a risk or a risky event happening.
Underwriting can be done in investment as well as in insurance.
From the study of these risks the company underwriting these risks will then decide how much of those risks they (risk-takers, example insurers) are willing to absorb. Once they decide on the quantum of risks they want to take on they will promise the other party whom the risk has been underwritten that they will provide something in return if the risks do happen. And this usually comes in either a sum insured or a certain return on investment or a loan or mortgage.