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
Individual who works in the home office of an insurance company and performs the function of underwriting to determine if an applicant is insurable at standard rates, substandard rates, ...
Total premiums generated from all policies written by an insurance company within a given period of time. ...
Coverage against foreign country expropriation underwritten by the overseas private investment corporation (OPIC) for U.S.-owned companies investing in given developing countries. ...
Clause in a surety bond contract providing for restoration of coverage after a loss without requirement of a restoration premium. ...
Extra percent of interest credited to an annuity during the first year that it is in force. This extra amount is above the interest rate to be credited beginning with the second year and ...
Principle that no liability exposure can result from the performance of proprietary functions. ...
Coverage for acts or omissions committed by an agent or broker resulting in adequate insurance in the event of a liability suit or property damage to a client. ...
Accidental death benefit option that can be added to a disability income (DI) policy under which a lump sum is payable at the loss of life, dismemberment, or loss of sight. ...
Same as term Associate in Risk Management: professional designation earned after the successful completion of three national examinations given by the insurance institute of America (IIA). ...
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