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
Present value of future benefits. This type of reserve would be applicable for single premium life insurance, paid-up insurance, single premium annuity, and a paid-up annuity. ...
Amount, not in excess of $10,000 per year, given to each of an unlimited number of donees free of federal estate tax and gift tax. Each individual can give up to $10,000 to any one donee, ...
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Dividend paid to policy-holder according to the time period in which the policy was sold and the investment return the insurance company made on that policy during that time period. ...
In property insurance policy, clause that stipulates that if legislative acts or acts of the insurance commissioner's office expand the coverage of an insurance policy or endorsement forms ...
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Coverage to indemnify an owner for whom work was done if the completed work is not free of worker's liens for labor and material. ...
Pension plan that allows an employee to contribute by electing to have money deducted from each paycheck. Some qualified plans such as 401 (k) allow employees to contribute pre-tax dollars, ...
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