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
Items, equipment, or systems used to increase, improve, or maintain the capabilities of people with disabilities. These devices range from simple, such as penholders or cup holders, to ...
Partial payment of medical service expenses required in group health insurance, in addition to the membership fee. For example, for each visit of a physician a member may be required to pay ...
Payments in a defined benefit plan. Benefits are allocated to the pension plan participants as premiums are received by the insurance company. Since the benefits purchased are paid up, the ...
Frequency of illness, sickness, and diseases contracted. ...
Indemnifies an insured whose property is stolen, damaged, or destroyed by a covered peril. The term property insurance encompasses numerous lines of available insurance. ...
Negligent acts and/or omissions, other than breach of contract, normally independent of moral obligations for which a remedy can be provided in a court of law. For example, a person injured ...
Coverage usually provided under the commercial general liability insurance (CGL); it can also be purchased separately. ...
Policy under which the insurer will pay the actual cash value of the property at the time the property was damaged or destroyed provided the loss falls within the limitations of the policy. ...
Provision of a reinsurance contract that states that the reinsurance company remains liable for its predetermined share of a claim submitted by an insured, even though the primary insurance ...
Have a question or comment?
We're here to help.