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
Provision in an insurance policy that indicates what is denied coverage. For example, common exclusions are: hazards deemed so catastrophic in nature that they are uninsurable, such as war; ...
Factors on the application that must be evaluated in order to complete the underwriting process: age; sex; physical condition; personal health history; family health history; financial ...
form of BOILER AND MACHINERY INSURANCE that covers power generating plants. form of BUSINESS INCOME COVERAGE FORM that covers a utility customer's losses resulting from interruption of ...
Liability insurance coverage for claims arising from acts that occurred before the beginning of the policy period. Policies written on a claims made basis, such as malpractice liability ...
Coverage for bodily injury and property damage liability resulting from the nuclear energy material (whether or not radioactive) on the insured business's premises or in transit. This ...
Property coverage for a builder of ships until possession passes to the owners. Protects against pre-launch and post-launch perils. Coverage can be purchased on an all risks basis subject ...
Total estimated cost incurred by a person or persons, a family, or a business resulting from the death or disability of a wage earner (key employee), damage or destruction of property, ...
Fidelity bond provided under a blanket position bond (in which each position is covered on an individual basis) or a commercial blanket bond (in which a loss is covered on a blanket basis ...
State laws based on a model law of the National Association of Insurance Commissioners (NAIC) that allow insurers to set rates independently; or adopt those rates developed by a rating ...
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