Underwriter (insurance)

An underwriter is an employee of a primary insurer or reinsurer who writes risks for his insurance company , reviews applications, assesses risks and concludes contracts. This process is called underwriting .

In the standardized private customer business (bulk business), underwriting is rarely spoken of, but the same process takes place here. The function of Underwriters assumes here the respective officer or underwriter of the insurance , which the application for the issuing of policies approaching.

Underwriting is of particular importance in the business with industrial and general large risks and in reinsurance. Depending on the risk , area and damage to be insured , extensive reports are prepared and possible damage scenarios are played out. The underwriters used for this at industrial and reinsurance companies are usually specialists such as engineers, geologists, environmental specialists, lawyers and mathematicians (e.g. actuaries ).

The term underwriter originated in the 17th century and comes from England and can be traced back to business practices in a coffee house. In 1688 Edward Lloyd ran a well-known coffee house in the City of London, where merchants, ship owners, bankers and insurance brokers regularly met for informal business talks. These business people were prepared to use their private assets to take on shipping risks in return for appropriate premiums (contributions), e.g. B. for the loss of the cargo (through piracy) up to the destruction of the ship. The shipowners went from businessman to businessman in order to "collect" cover for their risk. The business people participated by stating a percentage and signing it (“to underwrite”). This is how the term underwriter came about. In 1769, a group of privateers founded the New Lloyd's Coffee House , from which the Lloyd's of London company developed.