Underwriting Fees

AAA

DEFINITION of 'Underwriting Fees '

Underwriting fees are monies collected by underwriters for performing underwriting services. Underwriters work in a variety of markets including investments, mortgages and insurance. In each situation, the underwriter's jobs vary slightly yet each collects underwriting fees in exchange for his or her underwriting services.

INVESTOPEDIA EXPLAINS'Underwriting Fees '

In the capital markets, underwriting fees are collected by underwriters who administer the issuing and distributing of certain financial instruments. A mortgage underwriter earns underwriting fees by evaluating and verifying mortgage loan applications, and either approving or denying the loan. Insurance underwriters collect underwriting fees for identifying and calculating a policy holder's risk of loss, and by writing the policies to cover these risks.

RELATED TERMS
  1. Cash Flow Underwriting

    A pricing tool used by insurance companies. Cash flow underwriting ...
  2. Lead Underwriter

    A investment bank or other financial outfit that has the primary ...
  3. Underwriter

    A company or other entity that administers the public issuance ...
  4. Insurance Underwriter

    A financial professional that evaluates the risks of insuring ...
  5. Automated Underwriting

    A computer-generated loan underwriting decision. Using completed ...
  6. Underwriting

    1. The process by which investment bankers raise investment capital ...
Related Articles
  1. Brokers

    Brokerage Functions: Underwriting And Agency Roles

    Learning about these various activities can give insight into how securities are issued and traded.
  2. Professionals

    CFP, CLU Or ChFC - Which Is Best?

    The designation you choose will depend on which areas of financial planning you want as your focus.
  3. Insurance

    Is Insurance Underwriting Right For You?

    If you have excellent analytical skills and an eye for detail, this may be your calling.
  4. Options & Futures

    The Alphabet Soup Of Financial Certifications

    We decode the meaning of the many letters that can follow the names of financial professionals.
  5. Stock Analysis

    What AIG Looks Like Now (and How it Got that Way)

    Despite some mammoth mistakes and a gargantuan government bailout, AIG remains a global insurance powerhouse. Here's how it maintains its position.
  6. Insurance

    How Does Cash-Value Life Insurance Work?

    Cash-value life insurance pays a beneficiary upon the death of the policyholder, and accumulates a cash value during the policyholder’s lifetime.
  7. Insurance

    Extreme Mortality Bonds: High Risk and High Reward

    Insurance companies issue extreme mortality bonds to cover their losses in the event of a large-scale disaster. Here's a look into these high-risk, high-reward bonds.
  8. Brokers

    10 Most Famous Public Companies That Went Private

    Here’s a list of the most popular listed companies that went private in recent decades.
  9. Trading Strategies

    IPO Flippers And The Companies Who Hate Them

    Learn how flipping activity affects an initial public offering.
  10. Insurance

    The Best Way to Insure Your Jewelry

    What you need to know to keep those baubles, bangles and beads safe.
RELATED FAQS
  1. When is an underwriting fee too high on a commercial loan?

    An underwriting fee on any commercial loan is charged by the lender that underwrites or approves your loan. An underwriter ... Read Full Answer >>
  2. Do underwriters make guarantees to sell an entire IPO issue?

    Underwriters represent the group of representatives from an investment bank whose main responsibility is to complete the ... Read Full Answer >>
  3. How does investment banking differ from commercial banking?

    Investment banking and commercial banking are two primary segments of the banking industry. Investment banks facilitate the ... Read Full Answer >>
  4. What level of reserve ratios is typical for an insurance company to protect against ...

    In the United States, and most developed nations, regulators impose required statutory capital reserve ratios on insurance ... Read Full Answer >>
  5. What risks do I face when investing in the insurance sector?

    Like all equity investments, insurance companies present investors with market risk. Insurance companies, like banks, also ... Read Full Answer >>
  6. Why do insurance policies have deductibles?

    Insurance policies have deductibles for behavioral and financial reasons. Moral Hazards Deductibles mitigate the behavioral ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Dog And Pony Show

    A colloquial term that generally refers to a presentation or seminar to market new products or services to potential buyers.
  2. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  3. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  4. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  5. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  6. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!