Underwriter

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Definition: Underwriter


Underwriter

Quick Summary of Underwriter


A person who examines a risk, decides whether or not it can be insured, and, if it can, works out the appropriate premium to be charged, usually on the basis of frequency of past claims for similar risks.




What is the dictionary definition of Underwriter?

Dictionary Definition


Another term for an insurer, one who assumes the risk of another’s loss and compensates for the loss under the terms of an insurance policy.

  1. A person who examines a risk, decides whether or not it can be insured, and, if it can, works out the appropriate premium to be charged, usually on the basis of frequency of past claims for similar risks.
  2. A financial institution, typically a merchant bank, that guarantees to buy a proportion of any unsold shares when a new issue is offered to the public (IPO).
  3. A person who provides a guarantee for a financial transaction.

Full Definition of Underwriter


A person who examines a risk decides whether or not it can be insured, and, if it can, works out the appropriate premium to be charged, usually on the basis of frequency of past claims for similar risks.

Underwriters are usually either employed by insurance companies or are members of Lloyd’s.

The name arises from the early days of marine insurance, when a merchant would, as a sideline, write his name under the amount and details of the risk he had agreed to cover on a slip of paper.

A financial institution, typically a merchant bank, that guarantees to buy a proportion of any unsold shares when a new issue is offered to the public (IPO).

Underwriters typically work for a commission, and a number may collaborate together in order to buy all the unsold shares, provided that a minimum subscription stated in the prospectus has been sold to the public.

A person who provides a guarantee for a financial transaction.

An underwriter gives financial support and takes responsibility for paying any costs associated with the activity he or she underwrites. An underwriter is often someone in the insurance business who may assess the risks involved with enrolling an applicant for coverage or a particular policy. The underwriter must also compensate for any loss under the terms of the insurance policy. An underwriter may also serve as an intermediary between an issuer of a security and an investor. In this capacity, an underwriter buys an issue of securities from a company and resells it to the investors. As an underwriter, a person (or firm) bears the risk of selling the securities to the public and guarantees the proceeds from a sale, essentially taking ownership of the securities. If the underwriter can’t sell the securities at the asking price, the underwriter may have to sell them for less than they paid or retain the securities themselves.


Examples of Underwriter in a sentence


They were the underwriters of the company’s shares, but only on a best efforts basis.


Synonyms For Underwriter


insurer, insurance broker, insurance agent, sponsor, backer


Underwriter FAQ's


What Is A Underwriter?

1. An investment bank that acts as an intermediary between the issuing company and the investors who purchase the company’s debt instruments and/or stock at the Initial Public Offering (IPO). The underwriter buys the newly issued securities from the company and sells them to investors on the secondary market through a stock exchange. 2. An issuer of insurance policies.


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, from PayrollHeaven.com website: https://payrollheaven.com/define/underwriter/

Definition Sources


Definitions for Underwriter are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 21st November, 2021 | 0 Views.