What is Underwriting? Full Definition- Ikajo Glossary



Underwriting is a type of service usually supported by influential financial institutions: banks, insurances and other establishments. These organizations ensure the payment if you experience damage to the finances. They take full responsibility in such cases. The financial institutions do this in a number of specific states among them are insurances, a problem of securities and many others.

What is underwriting in banking?

Underwriting function in banking is a crucial action because the bank conducts the credit investigation ahead of the loan process.

What is underwriting in the insurance sphere?

In the insurance sphere, this means that the establishment evaluates the hazards of clients. It concludes how much insurance money the person should get in the case of incidents with the funds. For instance, in the banking on the chance of card issues, the most essential thing is a cardholder’s account record. After a detailed investigation, this institution makes a decision (positive or negative) about the underwriting, whether to pay out the money or not.

Underwriters are people who work for the insurance company and evaluate risks. Firstly, they know the nature of the risk. Secondly, they know how to prevent it. Underwriters are the employees to decide whether the insurance company will take the risk and insure the object.


  • Many companies have underwriting for this project.
  • Don’t worry about this because your credit card has an underwriting.
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