Case Study on Underwriting

There are also other forms of underwritings known as continuous underwriting, Real estate underwriting, Forensic underwriting, and Sponsorship underwriting.

Securities underwriting is based on investments of banks by raising investment capital from investors on behalf of corporations and the government and also the municipalities. Banks’ syndicate underwritten the transaction by the leading manager, which means they have taken on the risk of distributing the securities.

In banking, the detailed credit analysis preceding the granting of a loan is called underwriting, which depends on credit information furnished by the borrower. Consumer underwriting, Commercial underwriting, and Mortgage underwriting are as same as banking underwriting. This underwriting is completely based on income, appraisal, credit score, asset information, etc.

The process of evaluating a prospective insurance candidate for life insurance, health and wealth insurance, property and rental insurance is insurance underwriting. In this process of giving insurance companies get insured by researching clients payback capabilities and how much likely he can spend.

Real estate underwriting is a process of assessing the background of the borrower as well as the property borrower wants to buy. In this case, underwriting will determine the actual value of the property a borrower wants to purchase in which if the borrower can’t pay back the loan does the property actually worth that loan amount.

The “after-the-fact” process when the borrower can’t pay back the loan amount is mainly known as Forensic underwriting. In this matter, can the borrower get another loan or any kind of refinance in future before paying back this research on forensic underwriters.

Sponsorship underwriting also might refer to financial sponsorship of any venture, and is also used as a term within broadcasting in public both television and radio to describe funding given by an organization or company for the service operations.

The following are top responsibilities of an underwriter –

• Applications for insurance, loans, mortgage or IPOs examination.
• Finding potential borrowers based on their assets, background, income, and other factors for further paperwork.
• Evaluation of market risks and financial investments.
• Conduct research and evaluate applicants documents.
• Approving applications based on previous research and evaluation.

In summary, an underwriter decides the worthiness of taking risk for investment or giving loans to the borrower based on knowledge they gathered in their field. Specially, an underwriter who works with health insurance companies does the hard thing by evaluating the health condition of the borrower and also evaluating the future health risks. Assessing every possible thing that can help to evaluate or do research on the specific person is the main job of an underwriter.

Earning based on underwriting is named adjusted underwriting profit. Adjusted Underwriting Profit is the profit which an insurance company earns after paying all the expenses and insurance claims that damaged customers’ assets.

In conclusion, an underwriting process helps insurance companies, banks, and many investment companies by researching and evaluating borrowers data and assets and their capability for pay back or taking risks.

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