Changes
added Category:Underwriting using HotCat
{{unreferenced|date=December 2009}}
'''Underwriting profit''' is a term used in the [[insurance]] industry. It consists of the [[earned premium]] remaining after losses have been paid and administrative expenses have been deducted. It does not include any investment income earned on held [[Risk premium|premium]]s. Many companies will eschew underwriting profit in order to gain a greater [[market share]].
==Examples==
For example, an auto insurer collects money every month from its customers in the form of a premium. Should a customer have a covered auto accident, the company pays out a claim. In the time between the receipt of each premium payment and the paying of the claim, the money received by the insurer can be [[Investing|invested]]. [[Interest|Returns from investments]] are the primary source of profits for an insurance company. If the amount of premiums taken in is greater than the claims paid out, even before taking into account investment returns, the excess additional profit is called "underwriting profit". Another prime example occurs when using Insured Profits.
==See also==
* [[Insurance]]
* [[Financial services]] (broader industry to which insurance belongs)
* [[Insurance law]]
* [[List of finance topics]]
* [[List of finance topics#Insurance|List of insurance topics]]
* [[List of United States insurance companies]]
* [[Social security]]
* [[Opportunity cost]]
{{DEFAULTSORT:Underwriting Profit}}
[[Category:Insurance]]
[[Category:Underwriting]]
{{insurance-stub}}
'''Underwriting profit''' is a term used in the [[insurance]] industry. It consists of the [[earned premium]] remaining after losses have been paid and administrative expenses have been deducted. It does not include any investment income earned on held [[Risk premium|premium]]s. Many companies will eschew underwriting profit in order to gain a greater [[market share]].
==Examples==
For example, an auto insurer collects money every month from its customers in the form of a premium. Should a customer have a covered auto accident, the company pays out a claim. In the time between the receipt of each premium payment and the paying of the claim, the money received by the insurer can be [[Investing|invested]]. [[Interest|Returns from investments]] are the primary source of profits for an insurance company. If the amount of premiums taken in is greater than the claims paid out, even before taking into account investment returns, the excess additional profit is called "underwriting profit". Another prime example occurs when using Insured Profits.
==See also==
* [[Insurance]]
* [[Financial services]] (broader industry to which insurance belongs)
* [[Insurance law]]
* [[List of finance topics]]
* [[List of finance topics#Insurance|List of insurance topics]]
* [[List of United States insurance companies]]
* [[Social security]]
* [[Opportunity cost]]
{{DEFAULTSORT:Underwriting Profit}}
[[Category:Insurance]]
[[Category:Underwriting]]
{{insurance-stub}}
