Underwriting Cycle
Tendency of property and liability insurance premiums, insurers' profits, and availability of coverage to rise and fall with some regularity over time. A cycle can be said to begin when insurers tighten their underwriting standards and sharply raise premiums after a period of severe underwriting losses. Stricter standards and higher premium rates often bring dramatic increases in profits, attracting more capital to the insurance industry and raising underwriting capacity. On the other hand, as insurers strive to write more premiums at higher levels of profitability, premium rates may be driven down and underwriting standards relaxed in the competition for new business. Profits may erode and then turn into losses if more tax underwriting standards generate mounting claims. The stage would then be set for the cycle to begin again.
Popular Insurance Terms
Income payable to a surviving spouse or other beneficiary upon the death of the primary wage earner to bridge the gap until the beneficiary is self-sufficient. For example, income can be ...
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Under a general liability policy, a claim by an employer arising when an employee terminated by a supervisor without authority or just cause brings suit against the employer. Such a claim ...
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Same as term Cost-Of-Living Adjustment: automatic adjustment applied to Social Security retirement payments when the consumer price index increases at a rate of at least 3%, the first ...
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Option clause in a disability income policy that the insured can exercise that would permit the insured the right to purchase additional limits of coverage regardless of the insured's ...
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