Underwriter
The person or entity that accepts the risk and sets the price.
Definition
The party that decides whether to take a risk, on what terms and at what rate, and that carries the liability to pay. In the Lloyd's market an underwriter writes on behalf of a syndicate backed by capital providers; in the company market they write on behalf of an insurance company. A managing general agent underwrites on delegated authority from an insurer, within an agreed appetite.
Why it decides money
The quoting entity on a cargo risk is always an underwriter. The carrier moving the goods is not an insurer, and its liability is not cover.
Related terms
- Broker
- An intermediary acting for the insured in placing the risk.
- Managing general agent
- Underwrites on delegated authority from an insurer.
- Financial strength rating
- An agency's opinion of an insurer's ability to pay claims.
More in market and parties
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