Investopedia

Continue to Site »

Underwriting Income

Filed Under » , , , , ,
Dictionary Says

Definition of 'Underwriting Income '

Profit generated by an insurer's underwriting activity over a period of time. Underwriting income is the difference between premiums collected on insurance policies by the insurer, and expenses incurred and claims paid out. Huge claims and disproportionate expenses may result in an underwriting loss, rather than income, for the insurer. The level of underwriting income is an accurate measure of the efficiency of an insurer's underwriting activities.
Investopedia Says

Investopedia explains 'Underwriting Income '

For example, if an insurer collects $50 million in insurance premiums over a year, and spends $40 million in insurance claims and associated expenses, its underwriting income is $10 million.

An insurer's underwriting income may fluctuate from quarter to quarter, with natural and other disasters such as earthquakes, hurricanes and fires leading to huge underwriting losses. Hurricane Katrina, the largest natural catastrophe in US history, caused an underwriting loss of $2.8 billion for the US property/casualty insurance industry in the first nine months of 2005, compared with underwriting income of $3.4 billion in the corresponding period of 2004.

Articles Of Interest

  1.

    Is Insurance Underwriting Right For You?

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

  2. The History Of Insurance

    The first written policy appeared in Hammurabi's Code. Find out how it evolved from there.

  3. Brokerage Functions: Underwriting And Agency Roles

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

  4. Insure Your Future With A Career As An Actuary

    If you've got excellent math skills, they can add up to a lucrative career as an actuary.

  5. What To Do If Your Insurance Won't Pay

    Before paying for coverage, find out what you need to do to ensure you get paid.

  6. Financial Career Options For Professionals

    Find out if spreading your wings to try a new career will make you soar or fall flat.

  7. Top 5 Budgeting Questions Answered

    You don't need a degree to understand your money, begin saving and pay down debt.

  8. Investing In IPO ETFs

    Learn the history, rules and risks of investing in IPO exchange-traded funds.

  9. Finding Undiscovered Stocks

    Wall Street tends to focus on large cap stocks, leaving other stocks under-followed and undervalued.

  10. Small Caps Boast Big Advantages

    Find out why little companies have the greatest potential for growth.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  2. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  3. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  4. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  5. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.

  6. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.
Trading Center