Profit (or loss) realized from Insurance operations, as contrasted with that realized from investments.
Insurance Encyclopedia
Underwriting profit or loss
The amount of profit gained or loss experienced from an insurance policy. This term can also refer to the amount of premiums that exceeds losses and costs.
Underwriting profit/loss
Money earned or lost by an insurer in its underwriting activities as distinct from money earned from investments. Also called a technical profit calculated by earned premiums less losses, loss adjustment costs and other underwriting expenses incurred.
Underwriting requirements
Instructions giving information on data required for insurability for a given situation and optional information sources needed to provide underwriters with needed information about the insured (e.g., medical records or physical examination report). These requirements are graduated based on the insured’s age and the amount of insurance coverage.
Underwriting reserves
See: TECHNICAL RESERVES.
Underwriting Result
The difference between the premiums earned and the sum of claims and expenses incurred in a given year.
Underwriting risk
The risk that underwriting results will deviate adversely from the risk allowed for in assessing the premiums required to cover the pure risks accepted by the insurer. Poor underwriting decisions have an adverse impact on profitability.
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the possibility that the amount which a general insurer will have to pay to indemnify policy holders in respect of the perils covered by the insurance will exceed the amount anticipated in calculating the premiums (in life insurance this definition only applies to the mortality risk).
Underwriting year
For accounting and classification purposes it is the treaty year in which a contract was written or renewed. Applies to proportional reinsurance. See UNDERWRITING YEAR SYSTEM.
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The calendar year during which the risk attaches on the original Insurance.
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the accounting year of an insurer or Lloyd’s syndicate to which insurance business relates, usually determined by the date of inception; reinsurance contracts may be written by reference to the insurer’s business of a particular underwriting year, and will remain in force until all the claims referable to that underwriting have been settled.
Underwriting Year Basis
In rating the use of all premium written as arising from all policies written or renewed during the year and all losses relating to those same policies, whenever they occur.
Underwriting Year Experience
See: Basis of Attachment.
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Simplistically, the segregation of all premiums and losses attributable to policies having an inception or renewal date within a given 12 month period.
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Underwriting result based on written premiums and ultimate losses from loss events falling within the same accounting period, where the accounting period is the period covered by the insurance policy or reinsurance agreement, regardless of when the premiums and losses are actually reported, booked, or paid. See Accident year experience and Calendar year experience. Underwriting losses are typically offset by investment income.