Au 60 Commercial Underwriting Principles

Front 1

Underwriting

Back 1

The process of selecting insureds, pricing coverage, determining insurance policy terms and conditions, and then monitoring the underwriting decisions made

Front 2

Book of Business

Back 2

A group of policies with a common characteristic, such as territory or type of coverage, or all policies written by a particular insurer or agency

Front 3

Adverse Selection

Back 3

The tendency for people with the greatest probability of loss to be the ones most likely to purchase insurance

Front 4

Policyholder's Surplus

Back 4

Under statutory accounting principles (sap), an insurer's total admitted assets minus its total liabilities

Front 5

Capacity

Back 5

The amount of business an insurer is able to write, usually based on a comparison of the insurer's written premiums to its policyholders' surplus

Front 6

Underwriting Guidelines

Back 6

A written manual that communicates an insurer's underwriting policy and that specifies the attributes of an account that an insurer is willing to insure

Front 7

Underwriting Authority

Back 7

The scope of decisions that an underwriter can make without receiving approval from someone at a higher level

Front 8

Line underwriter

Back 8

Underwrtier who is primarily responsible for implementing the steps in the underwriting process

Front 9

Staff underwriter

Back 9

Underwriter who is usually located in the home office and who assists underwriting management with making and implementing underwriting policy

Front 10

Manuscript policy

Back 10

An insurance policy that is specifically drafted according to terms negotiated between a specific insured and an insurer

Front 11

Underwriting policy

Back 11

A guide to individual and aggregate policy selection that supports an insurer's mission statement

Front 12

Advisory organization

Back 12

An independent organization that works with and on behalf of insurers that purchase or subscribe to its services

Front 13

Prospective loss costs

Back 13

loss data that are modified by loss development, trending and credibility processes, but without considerations for profit and expense

Front 14

Loss development

Back 14

The increase or decrease of incurred losses over time